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The Resource Center Identity Theft & Protection The Resource Center | article

Identity Theft Victims Wait Nine Months for Tax Refunds

A new report by the Treasury Inspector General for Tax Administration finds that the average delay in receiving a tax refund after identity theft was 278 days, or nine months.

A new report by the Treasury Inspector General for Tax Administration finds that the average delay in receiving a tax refund after identity theft was 278 days, or nine months.

According to the Internal Revenue Service (IRS), a typical tax identity theft case takes about 180 days — or six months — to resolve, at which point tax payers receive the refunds due to them. The IRS states that they are “working to reduce that time period.” However, according to a new report by the Treasury Inspector General for Tax Administration (TIGTA) the average delay in receiving a refund was 278 days, or nine months.

According to the audit, which examined tax accounts resolved in the fiscal year 2013 — October 1, 2012 through September 30, 2013 — the time from when the IRS received victims’ tax returns until the agency paid out the correct refund to the rightful owner ranged from 16 to 762 days. In addition, in 10 percent of identity theft cases IRS resolutions were done incorrectly, resulting in even more delays for the victim.

The TIGTA states that many of the delays are due to repeated case reassignment. Cases go from one assistor to another, often sitting on desks for long periods of time. Transfers are reassigned to an average of seven assistors and the average inactivity on a case is 254 days.

TIGTA auditors asked accounts management officials at the IRS why identity theft cases were transferred so often. The report states that the offic​ials were unable to recall specific circumstances surrounding case reassignment. However, “the IRS informed us that the cases are complex and IRS management is more interested in identifying a trained employee to work an identity theft case than the number of case reassignments. Thus, cases can remain in a manager’s inventory, unassigned to an assistor, until the manager finds an available identity theft trained assistor.”

The good news is that all of these statistics have dropped since the TIGTA’s last audit, for the 2012 fiscal year, when the overall delay was 34 days longer, cases were reassigned an average of 10 times and case inactivity was 277 days. However, the new numbers are still far higher than what the IRS claims is their review time. And while the IRS was able to stop $50 billion in fraudulent tax returns last year, it still lost around $5.2 billion to identity thieves.

Tax filers will want to remain patient as they await their tax returns after identity theft. It’s also important to take these steps to help expedite identity theft cases or protect yourself against them:

  • File taxes early, since identity thieves are banking on you filing late so that they can get to your refund first.
  • Don’t fall for calls or emails from IRS impersonators. Remember, the IRS will conduct business with you through mail, and will never solicit information from you over the phone or online. Contact phishing@irs.gov if you receive suspicious emails and ftccomplaintassistant.gov to report telephone scams.

Tax season is rife with scams and identity thieves looking to get lucky. Use a credit monitoring service, which can alert you to certain types of activities that might indicate identity theft.

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