Backlog of identity theft cases at IRS leaving many without refunds 

A backlog of identity theft cases at the Internal Revenue Service is growing. Photo by Madalina Vasiliu 
A backlog of identity theft cases at the Internal Revenue Service is growing. Photo by Madalina Vasiliu 

By Zachary Stieber 
Contributing Writer 

A backlog of identity theft cases at the Internal Revenue Service is growing, hitting 500,000 in April, according to a new report from National Taxpayer Advocate Erin Collins. 

The Taxpayer Advocate Service, led by Collins, is an independent organization within the IRS that issues two annual reports to Congress, reporting findings and making recommendations on how to fix them. 

The major backlog has led to some taxpayers not receiving refunds and others not seeing their cases get resolved for years, according to Erin Collins. 

The average resolution time for the cases was more than 22 months. 

“Delays of nearly two years make a mockery of the right to quality service in the Taxpayer Bill of Rights. The IRS must prioritize assistance for these victims and fix this problem quickly,” Collins wrote in her fiscal year 2025 report to Congress. 

When IRS workers learn an identity thief filed a fake return using a taxpayer’s sensitive information, the taxpayer must submit a form called an identity theft affidavit and a paper return. The IRS freezes the taxpayer’s actual return while it investigates identity theft victim assistance cases. As of 2023, the cases were taking about 19 months to resolve, and the backlog was around 484,000 cases. 

The delays and backlog have grown worse since then, in part because more identity theft cases are coming in, according to Collins. The taxpayer advocate also found that the IRS has been removing workers from the cases to work on other assignments, including answering phone calls during the filing season. 

“This problem started during the COVID-19 pandemic. However, the onset of the pandemic was over four years ago. It is no longer reasonable to associate the pandemic challenges with high IDTVA case resolution times,” Collins said, adding later: “These taxpayers are already victims of a bad actor who stole their identity and used it to file a fraudulent return. The IRS is revictimizing taxpayers.” 

The IRS has taken steps to remedy the problems, including increasing the number of employees that work on the cases, according to Collins. 

An IRS spokesperson did not respond to a request for comment. 

Collins also found that IRS employees only answered 31% of the nearly 40 million calls it received from taxpayers in 2024. While the agency’s handling of calls improved over prior years, the agency still has to do better to answer calls and prioritize people with pressing issues such as those facing eviction due to IRS levies, Collins said. 

One area that could be improved is tasking staffers who handle certain phone lines with completing other work when the phones aren’t ringing. Those employees spent 1.1 million hours, or about a third of their time, “sitting around waiting for the phone to ring,” the report stated. 

Sen. Todd Young, R-Indiana, a member of the Senate Finance Committee, said in a statement that his office “continues to hear from Hoosiers who are having trouble obtaining assistance or even getting their phone calls answered.” He said that the IRS “must do better.” 

Collins recommended the IRS fix issues with its e-filing system, work to improve hiring and training, and better explain to taxpayers the information they need “in an accessible, clear, and sufficiently detailed way.” 

Collins also expressed optimism about the future of the IRS as she commented on its work since the COVID-19 pandemic started. 

“I also want to acknowledge, recognize, and thank other IRS employees, managers, and leaders for administering the last four filing seasons, wherein taxpayers received hundreds of millions of much-needed refunds, stimulus payments, and other congressionally authorized tax benefits,” she wrote. 

“Did the IRS do a perfect job? No. But I believe the IRS has turned the corner, and with the additional multiyear funding provided by the Inflation Reduction Act, particularly for taxpayer services and information technology (IT) modernization, I am bullish that the taxpayer experience will continue to improve and move onward and upward.” 

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