Identity Theft and Fraudulent Tax Returns

Posted on December 16, 2013

Although the IRS has improved its efforts to find fraudulent tax returns and to reduce fraudulent refunds, the IRS still takes nearly a year to resolve cases where taxpayers have been stung by identity theft according to recent reports from the Treasury Inspector General for Tax Administration.

According to the reports, it took an average of 312 days for the IRS to resolve a sample group of tax identity theft cases. Worse yet, in each of the sample cases there was an average of 277 days of IRS delays stemming from inactivity on those cases.

On the upside, the IRS identified 1.84 million tax returns as containing fraudulent identity theft issues and prevented the issuance of $1.21 billion in fraudulent refunds in 2012, an increase over the prior year. In a related press briefing, the IRS correctly stated that its detection efforts are improving but also admits that there are some areas on the customer service side that must be addressed, a reference to the delay in resolving taxpayer’s cases. Has your identity been stolen or has someone filed a tax return or claimed a refund in your name?

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