Nearly two years have passed since the IRS began assisting tax identity theft victims in recovering their refunds.

• Last week, the National Taxpayer Advocate reported that tax identity theft victims are experiencing delays of nearly two years in receiving resolution and refunds from the IRS.
• The number of unresolved cases at the agency increased from 484,000 in September to about 500,000 as of April.
• The IRS is currently developing a range of enhancements to tackle the problem.

The IRS is currently facing a backlog of tax identity theft cases, but the agency is taking steps to improve its service.

Erin Collins, the National Taxpayer Advocate, reported last week that the agency had approximately 500,000 unresolved identity theft cases as of April, an increase from 484,000 cases in September. Identity theft victims have been waiting over 22 months for resolution, followed by several additional weeks for refunds.

When criminals steal personal information and file fraudulent tax returns, the IRS rejects and freezes the second return for investigation.

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The wait for identity theft victims to receive resolution and refunds has increased to 19 months due to Covid-19 shutdowns and pandemic relief, as reported by Collins in January.

The delays have caused "significant hardship" for taxpayers, particularly lower earners, she stated.

Over 68% of the cases involved taxpayers whose income was below 2.5 times the federal poverty level.

Last week, Collins wrote that it is unconscionable for the IRS to have delayed helping pandemic victims for four years.

The IRS stated that despite improvements in taxpayer service during the 2024 season, the backlog of identity theft cases remains a significant ongoing service gap.

IRS plans for 'faster service'

The IRS is currently working on enhancing its services to better assist identity theft victims by providing additional resources to handle cases more efficiently.

The agency intends to review its processes and consult with stakeholders to "identify and prevent emerging tax-related identity theft threats."

The IRS stated that identity theft cases are complex and take time to resolve, but with increased funding, the agency is now better positioned to tackle these cases more quickly.

Tax professionals were advised by the agency on Tuesday to safeguard themselves from identity theft criminals who may be targeting them and their clients.

IRS Commissioner Danny Werfel stated on Tuesday that security threats against tax professionals and their clients' sensitive tax information are constantly changing, and it is crucial to remain vigilant to safeguard their business and clients.