Taxpayer Advocate Service: Your Voice at the IRS

National Taxpayer Advocate Annual Report to Congress

Identity Theft Victim Assistance

A New Approach is Needed for Identity Theft Cases

Tax-related identity theft wreaks havoc on the lives of its many victims, who must deal with the IRS for months or years to untangle their account problems. To its credit, the IRS has recognized identity theft as a major challenge, but still takes much too long to fully unwind the harm suffered by identity theft victims and issue refunds to the legitimate taxpayers. 
 
A September 2013 Treasury inspector general report found the IRS took an average of 312 days to fully resolve identity theft cases. In contrast, TAS has been able to close identity theft cases in an average of 87 days. We believe this is because our customers work with a single point of contact who is responsible for all aspects of their cases.
 
The IRS’s current approach to helping ID theft victims requires coordination among over 20 different units, allowing too many victims to fall between the cracks. The IRS must recognize that identity theft is a traumatic crime whose victims require one-on-one assistance. The IRS should set up a centralized unit, similar to the one that helps taxpayers who are victims of domestic abuse. The IRS should assign one person within the centralized unit to work with each victim until the IRS has done everything possible to resolve the taxpayer’s account.
 

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The IRS must recognize that victims of identity theft are not just experiencing minor tax issues, but are victims of a traumatic crime and
re-evaluate its approach to identity theft victim assistance.