Tax Identity Theft Cases Take Months to Resolve, IRS Warns of Scams
Tax identity theft occurs when someone uses a taxpayer's Social Security number (SSN) and personal information to file a fraudulent tax return, claim a refund, obtain employment, or claim dependents. The IRS processes the first return filed under an SSN, rejecting subsequent legitimate filings as duplicates. If a fraudulent return is caught by IRS filters, the agency holds it and requests identity verification from the taxpayer. However, if a thief's return is processed, the case is transferred to the IRS Identity Theft Victim Assistance Unit, where resolutions can take approximately 20 months, with refunds on hold until the case is closed. The IRS actively combats this fraud, stopping billions in fraudulent refunds annually, but individual cases still impact taxpayers. Victims often discover the theft through rejected e-files, IRS letters requesting identity verification, or notices about suspicious returns they did not file. The IRS emphasizes that it primarily contacts taxpayers by mail and does not ini...