Victims of tax identity theft face ‘unconscionable’ IRS delays, taxpayer advocate finds
Victims of tax identity theft face ‘unconscionable’ IRS delays, taxpayer advocate finds

Erin Collins, nationwide taxpayer advocate on the Taxpayer Advocate Service, speaks at a Senate Appropriations subcommittee listening to in Washington, D.C., on May 19, 2021.

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After just a few difficult years, the IRS has boosted taxpayer service and expertise with an infusion of funding. But there’s nonetheless room for enchancment — particularly for tax identity theft victims, in response to the company’s inside watchdog.

The National Taxpayer Advocate on Wednesday launched its annual report to Congress, which cited “unconscionable delays” in IRS help for victims of tax-related identity theft.

“Individuals who’re victims of tax-related identity theft are ready a median of almost 19 months for the IRS to course of their returns and ship their refunds,” wrote National Taxpayer Advocate Erin Collins.

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Shifted assets contributed to “unreasonable” delays for identity theft victims and returns flagged for potential identity theft, in response to the report. During fiscal 2023, the IRS reassigned 572 employees to deal with phone service.

The company’s Identity Theft Victim Assistance program had 294,138 particular person case receipts throughout fiscal 2023, up from 92,631 in 2019. Resolution occasions have skyrocketed to 556 days, which far exceeds the company’s 120-day objective.

“It’s too early to inform what the brand new tax submitting season will deliver, however with a document quantity of information breaches reported in 2023 flooding identity markets with extra private data, it is seemingly we’ll see extra makes an attempt to impersonate tax filers this 12 months,” stated James Lee, chief working officer of the Identity Theft Resource Center.

“The Taxpayer Advocate raises a quantity of crucial areas that we’re to make enhancements underneath our strategic operating plan with Inflation Reduction Act funding,” IRS Commissioner Danny Werfel stated in an announcement. 

“Many of these points recognized in her report in the end rely on ample IRS assets,” he stated. “This is another excuse why the Inflation Reduction Act funding and our annual appropriations are so important to creating transformational adjustments to the IRS to assist taxpayers and the nation.” 

The feedback come as Congress faces a looming government shutdown deadline, with negotiations for potential IRS funding cuts.

Tax identity theft typically impacts decrease earners

With many Americans counting on tax refunds, these delays can create monetary hardship, notably for decrease earners claiming the earned income tax credit. Some 69% of taxpayers with resolved identity theft instances had adjusted gross incomes at or under 250% of the federal poverty degree, IRS information exhibits.

“The IRS ought to do all the things potential to well timed help these victims and supply them with the peace of thoughts that the IRS is looking for his or her finest pursuits and defending their rights,” Collins wrote.

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