The IRS is currently facing a significant challenge with an increasing number of tax identity theft cases. According to a report by National Taxpayer Advocate Erin Collins, there are about 500,000 unresolved cases of identity theft as of April. This number has seen a rise from 484,000 cases in September, indicating a growing backlog of cases that the agency is struggling to address.
Identity theft victims have been experiencing long waiting times for resolution, with an average wait time of more than 22 months as of April. This has caused frustration and hardship for taxpayers, particularly those with lower incomes. The delays in resolving cases have been attributed to various factors, including Covid-19 shutdowns and the influx of pandemic-related relief efforts.
While the IRS has acknowledged the challenges it faces with identity theft cases, the agency is working on a range of improvements to expedite service delivery. This includes committing more resources to work on cases and reviewing current processes to identify and prevent evolving threats related to tax-related identity theft. The agency has also stated that increased funding has helped improve its ability to address these complex cases more efficiently.
In light of the rising number of identity theft cases, the IRS has issued a warning to tax professionals to protect themselves and their clients from potential identity theft criminals. The agency advises tax professionals to be vigilant and take necessary precautions to safeguard sensitive information and prevent fraudulent activities that could compromise their clients’ financial security.
The IRS is facing significant challenges with the growing number of tax identity theft cases, leading to delays in resolving cases and providing refunds to victims. While the agency is making efforts to improve its service delivery by committing more resources and reviewing processes, there is still a long way to go in addressing this ongoing issue. Taxpayers and tax professionals alike must remain vigilant and take proactive measures to protect themselves from identity theft threats in today’s digital age.