Watchdog: IRS delays in resolving identity theft cases ‘unconscionable’

An independent watchdog says the Internal Revenue Service’s (IRS) delays in resolving identity theft cases are “unconscionable.”

A mid-year report to Congress from The National Taxpayer Advocate, an independent watchdog within the IRS, found that while the 2024 tax season “generally ran smoothly,” there were delays in concluding identity theft cases and sending the necessary refunds.

Erin M. Collins, who leads the watchdog, criticized the IRS’s pace in resolving the identity theft crisis as “lengthy and a blemish on its performance.” She noted that she also took aim at the IRS over the delays in her 2023 Annual Report to Congress, in which she highlighted the same concerns.

“IRS delays in resolving identity theft victim assistance cases are unconscionable,” she wrote.

Collins noted that most of the cases affected those at or below the federal poverty line, who needed the refunds for living expenses.

She said in the report last year that the IRS was taking about 19 months to resolve these cases and send refunds to the taxpayers, and in the most recent report wrote that “the problem has grown worse.” The report found that as of April 2024, the IRS was taking 22 months to resolve the cases and that it had about 550,000 cases left in its inventory.

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

Despite these delays, Collins said the IRS “has now delivered two filing seasons that demonstrate the agency has restored service to pre-pandemic levels and has improved in most, but not all, areas of service.”

“Not to be overly dramatic, but during the last four years, I believe we have progressed from a place of despair to a place of hope and optimism for the future of the agency and therefore for taxpayers,” she wrote.

The Taxpayer Advocate Service is an independent organization within the IRS that makes recommendations to correct issues taxpayers may have with the IRS. According to the website, the IRS will respond to the service’s top recommendations for fiscal year 2025 next month.

The Hill has reached out to the Treasury Department for comment.

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