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U.S. Treasury Inspector General for Tax Administration (TIGTA)…Identity Theft Victim Customer Service Still Slow as Molasses

Identity theft has been a hot topic in the tax realm over the past few years. Things haven’t cooled down yet, with the IRS feeling the heat this time around. TIGTA recently conducted an audit of the IRS’s response quality for tax return identity theft victims and what they found wasn’t good. On average, such victims had to wait 278 days for the IRS to resolve their accounts. In other words, not only did these taxpayers have to deal with someone stealing their name and Taxpayer Identification Number/SSN, they also had to deal with the IRS taking its sweet time to solve their cases so they could get on with filing their taxes and receiving their refunds.

In the same audit, TIGTA also discovered that good things don’t always come to those who wait. Apparently, the IRS ended up not even correctly resolving 17 percent of accounts in the examined statistical sample of affected taxpayers. By the numbers, this means that possibly 25,565 of the 267,962 identity theft accounts resolved from Oct. 1, 2012 to Sept. 30, 2013 were actually resolved incorrectly, with the victims’ refunds delayed or the wrong amount issued. The IRS has been telling a different story to taxpayers, which TIGTA shone the spotlight on as well. They found IRS case resolution reports to be misleading, with the agency, for example, assuring identity theft victims that their cases would be cleared up in 180 days.

As a result, TIGTA had some sage advice for the Internal Revenue Service in terms of tax return identity theft case troubleshooting. For example, they recommended that an identity theft training course be developed to teach assistors how to handle complex cases, and that the IRS come up with procedures for accurately calculating the average time it takes to fully resolve taxpayer accounts affected by identity theft. Although the IRS agreed with 3.5 out of TIGTA’s 5 recommendations, they disagreed with the latter about improving tracking of account resolution time-frames.

Accordingly, any taxpayers affected by identity theft shouldn’t hold their breath in the hopes that everything will be resolved right on schedule. Hopefully the IRS will implement TIGTA’s other suggested solutions with positive results in the near future, but in the meantime, the agency’s assurances should be taken with a grain of salt.