Identity theft victims face ‘unconscionable’ IRS delays, report says

Victims of identity theft face delays that are not “drastic” at the Internal Revenue Service, a dynamic that is causing headaches and financial hardship for many Americans amid severe staffing cuts at the federal agency. report The report to Congress was released Wednesday by the National Taxpayer Advocate, the IRS’s internal watchdog.

More than 500,000 victims of tax-related identity theft are currently awaiting resolution from the IRS, the report states. It currently takes the agency about 20 months (almost two years) to close cases, according to the report.

Tax-related identity theft occurs when someone files a tax return using a taxpayer’s stolen Social Security number to fraudulently claim a refund.

This can lead to a number of administrative and financial problems for taxpayers, including the temporary suspension of tax refunds.

“For many low- and moderate-income taxpayers, waiting nearly two years for a refund is not just an inconvenience; it can mean falling behind on rent, utilities, transportation costs and other basic living expenses,” National Taxpayer Advocate Erin Collins said in the report. he wrote.

“For all taxpayers, this delayed process is frustrating, burdensome, difficult to manage, and time-consuming,” he wrote.

The IRS did not immediately return a request for comment.

Collins directs Taxpayer Advocacy ServiceIt is an independent agency within the IRS that acts as a watchdog for consumers. Former Treasury Secretary Steven Mnuchin appointed Collins was appointed during the first Trump administration in 2020.

U.S. tax law requires the National Taxpayer Advocate to submit two reports to Congress each year.

This is the first of a series of reports outlining advocacy goals for the upcoming fiscal year; one of which is taxpayer identity theft.

The report comes amid a drastic workforce reduction at the IRS, including cuts to Elon Musk’s so-called Department of Government Efficiency (DOGE) in 2025.

The agency employed 74,000 people at the beginning of the 2026 tax filing season, a 27% decrease from 102,000 employees the previous year, Collins wrote.

Collins first warned of serious taxpayer delays in 2023 from identity theft. Since then, the backlog of victims and waiting times have also increased. In fiscal year 2023, the IRS had a backlog of nearly 484,000 cases and took about 19 months to resolve them, Collins said wrote In that case.

There has been an increase in the number of Americans reporting tax-related identity theft to federal regulators in recent years.

The Federal Bureau of Investigation reported a 26 percent increase last year in consumer complaints about “criminal actors” stealing taxpayer identities, filing false tax returns and fraudulently requesting refunds. in question.