Victims of identity theft have to wait for tax refunds
Victims of identity theft often go through hell trying to regain their financial identities. Adding to their misery, the IRS says that those victims may have to wait six months or longer before they can expect to receive their tax refunds.
‘Unacceptable wait’ for Identity theft victims
According to the watchdog Taxpayer Advocate Service, the IRS does not send refunds to the victims of identity theft before it processes a plethora of internal red tape, even if the victim’s case has been cleared and he or she is due a refund. That can take as long as 180 days, says the IRS. In some cases it could be even longer, as much as 196 days.
The TAS, in its annual report to Congress, said that delay could be reduced considerably if those victims — who are likely in need of any resource they can claim — were sent refunds as soon as it was determined that they are free of culpability.
According to CNN Money, three-quarter of taxpayers who have refunds coming can expect $3,000 or more. So the funds could be significant, and the delay exacerbates the problems of people struggling to regain their financial reputation.
Nina Olson of the TAS said that six months or more is “an unacceptable period of time to expect taxpayer-victims to wait.”
TAS recommendation to Congress
The TAS report also suggested that the IRS could streamline its efforts by consolidating its 21 agencies used to handle identity theft cases into a single entity.
In its own report, the tax bureau said that each agency has a specific focus, which it says is necessary and effective. It did not give a time frame as to how long it takes to resolve each case, but it did say that it has tripled the number of employees working on them and is increasing its efforts to effectively deal with the rising problem.
A growing problem
According to the TAS, tax-related identity theft has escalated by 650 percent since 2008. As of January 1, the IRS still had 650,000 unresolved tax-related identity theft cases.
Can’t even answer the phone
The IRS has also had its efforts hampered by the yearly budget cuts it has received since 2010. It is not even able to answer all of the calls from taxpayers. In 2012, the agency answered only 68 percent of its calls, according to CNN Money. That is way down from the 87 percent it could handle in 2004. Callers now can expect an average wait time of 17 minutes before calls are answered. In 2004, that wait was only an average two and a half minutes.