The IRS is currently facing a major issue with a backlog of tax identity theft cases, with approximately 500,000 unresolved cases as of April. This number has seen an increase from 484,000 cases reported in September. Victims of identity theft have been left waiting for more than 22 months for resolution, exacerbating the issue further.
The delays in resolving tax identity theft cases have led to significant hardships for taxpayers, particularly those with lower incomes. Nearly 70% of the cases involved taxpayers with an adjusted gross income at or below 250% of the federal poverty level. These delays have been attributed to the Covid-19 shutdowns and pandemic relief efforts, prolonging the wait for many individuals.
While the IRS has acknowledged the challenges posed by the backlog of identity theft cases, they have also indicated that they are working on a range of improvements to address the issue. The agency has committed to providing faster service to victims of identity theft by allocating more resources to work on these cases. Additionally, the IRS plans to review its processes and collaborate with stakeholders to identify and prevent evolving tax-related identity theft threats.
Complexity of Identity Theft Cases
The IRS recognizes that identity theft cases are complex and require time to resolve. However, the increased funding provided to the agency has enabled them to better address these cases more efficiently. Despite these efforts, the IRS has also issued a warning to tax professionals to safeguard themselves against potential identity theft criminals who may be targeting them and their clients.
The IRS is facing significant challenges in handling tax identity theft cases, leading to prolonged wait times for resolution and refunds for victims. While the agency is making efforts to streamline the process and provide faster service, there is still much work to be done to address the backlog of cases and prevent future incidents of tax-related identity theft.