Individuals stroll previous the U.S. Inner Income Service (IRS) constructing in Washington, D.C., U.S., Nov. 14, 2025.
Elizabeth Frantz | Reuters
Victims of id theft face “unconscionable” delays on the Inner Income Service, a dynamic inflicting complications and monetary hardship for a lot of Individuals that comes amid steep staffing cuts on the federal company, in response to a report to Congress revealed Wednesday by the Nationwide Taxpayer Advocate, an inside IRS watchdog.
Greater than 500,000 victims of tax-related id theft are at the moment awaiting decision from the IRS, the report stated. The company is at the moment taking about 20 months — practically two years — to shut their circumstances, in response to the report.
Tax-related id theft occurs when somebody information a tax return to assert a fraudulent refund through the use of a taxpayer’s stolen Social Safety quantity.
It might probably set off a cascade of administrative and monetary points for taxpayers, together with briefly withheld tax refunds.
“For a lot of low- and middle-income taxpayers, ready practically two years for a refund just isn’t merely an inconvenience — it could actually imply falling behind on hire, utilities, transportation prices, and different fundamental residing bills,” Erin Collins, the Nationwide Taxpayer Advocate, wrote within the report.
“For all taxpayers, this delayed course of is irritating, burdensome, tough to navigate, and time-consuming,” she wrote.
The IRS did not instantly return a request for remark.
Collins oversees the Taxpayer Advocate Service, an unbiased group throughout the IRS that serves as a watchdog for customers. Former Treasury Secretary Steven Mnuchin appointed Collins to the function in 2020 through the first Trump administration.
U.S. tax legislation requires the Nationwide Taxpayer Advocate to subject two studies to Congress every year.
That is the primary of these studies, which outlines advocacy targets for the upcoming fiscal yr — one in every of which is taxpayer id theft.
The report comes amid a deep workforce discount on the IRS, together with cuts from Elon Musk’s so-called Division of Authorities Effectivity, or DOGE, in 2025.
The company employed 74,000 individuals initially of the 2026 tax-filing season, a 27% discount from the 102,000 staff a yr earlier, Collins wrote.
Collins first warned of extreme delays tied to taxpayer id theft in 2023. Since then, the backlog of victims has solely grown, as have wait instances. In fiscal yr 2023, the IRS had a backlog of about 484,000 circumstances and took about 19 months to resolve them, Collins wrote on the time.
There has been an uptick within the variety of Individuals reporting tax-related id theft to federal regulators lately.
The Federal Bureau of Investigations final yr noticed a 26% year-over-year improve in shopper complaints tied to “legal actors” stealing taxpayer identities to file false tax returns and fraudulently declare refunds, the company stated.
