Protect Your Tax Identity: How to Avoid IRS Delays and Fraud

Protect Your Tax Identity: How to Avoid IRS Delays and Fraud

Imagine filing your tax return, expecting a refund—only to find out someone else beat you to it. Now, instead of a quick resolution, you’re stuck in a backlog that could take up to two years. Sound frustrating? According to the latest Taxpayer Advocacy Service report, this is the reality for thousands of taxpayers dealing with identity theft.

Major IRS Delays in Resolving Identity Theft Cases

Each year, the National Taxpayer Advocate highlights the 10 most serious problems taxpayers face when dealing with the IRS. The report also proposes solutions to improve these issues.

One of the most critical concerns identified in the latest report?

Tax Identity Theft Victims Face Unacceptable Delays

According to the report, “For cases closed by the IRS’s Identity Theft Victim Assistance (IDTVA) unit in Fiscal Year 2024, the average time it took the IRS to resolve identity theft cases and issue refunds to affected victims was almost two years.”

Yes, you read that correctly—it can take up to two years for a taxpayer to have their identity theft case resolved and receive their refund. It’s frustrating enough to be a victim of identity theft, but waiting years for a resolution makes it even worse.

While the Taxpayer Advocacy Service is pushing for change, IRS improvements take time. That means it’s up to taxpayers to take proactive steps to protect themselves from identity theft. Here’s how you can safeguard your tax return now:

Proactive Steps to Protect Yourself from IRS Identity Theft

1. File Early
If you have any reason to believe your personal information has been compromised, file your tax return as early as possible. This is especially important if you’ve received notices from businesses warning of a data breach involving your information. Filing early reduces the chances of a fraudster filing in your name before you do.

2. Check Your Credit Reports Regularly
Every year, the three major credit bureaus—Equifax, Experian, and TransUnion—must provide you with a free credit report. Take advantage of this! The start of the year is a great time to review your reports for any suspicious activity. If you notice anything unusual, consider filing your tax return immediately to prevent further fraud. You can access your free reports at AnnualCreditReport.com.

3. Consider Enrolling in the IRS Identity Protection PIN Program
The IRS Identity Protection PIN (IP PIN) program is an added layer of security for taxpayers concerned about identity theft. This program assigns a unique PIN to use when filing your federal tax return, ensuring that only you can file under your Social Security number. While it requires some extra steps, it’s worth considering if you want to prevent fraudulent tax filings in your name.

Looking Ahead: Will Change Come?

While taxpayers wait for potential reforms to be implemented, the Taxpayer Advocacy Service report is a crucial push for action—whether from the IRS directly or through legislative intervention.

Tax identity theft can be devastating, but you’re not powerless. Take a few minutes today to check your credit report, set up an IRS Identity Protection PIN, and file as early as possible. Need help navigating tax security? Contact our office—we’re here to help.