id theft a problem for irs even when it doesn’t exist

faceless hooded male person, low lighting and words "identity theft" repeated throughout

either way it consumes scarce resources.

by 卡塔尔世界杯常规比赛时间 research

tax return identity theft’s a bummer.

how big a bummer?

so big that even when there’s no theft, it’s a bummer.

more: the nightmare of non-credentialed tax preparers | taxpayer assistance centers: a good idea that should be better | irs still falling short on service | must the irs be a dark hole? | 10 tips to the irs for beefing up staff | eight ways the irs can speed up processing tax returns | irs plays whac-a-mole with the phones | ten irs problems that need solutions | treasury ig sees progress at irs | vcs plunk $60 million into ai-powered ‘autonomous’ tax prep
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

it’s a bummer when it happens, not only because it happened but because the internal revenue service can take up to 19 months to recognize the problem, do something about it and send the hapless taxpayer a refund not for this year’s return, not for last year’s return, but for the year before last.

and it’s a bummer when there’s no theft involved because when the irs’s rickety technology flags a return as a possible id theft, the return gets delayed for months and months of manual processing.

must it be this way?

a flood of fakes

the national taxpayers advocate considers the resolution of identity theft issues to be one of the 10 most challenging problems at the irs. she pointed our four aspects of the overall problem.

  1. victims of tax-related id theft wait way too long for the irs to process their returns and send their refunds.
  2. irs systems for detecting and preventing the fraud struggle with high false detection rates, subjecting refund delays for legitimate returns.
  3. taxpayers receive only one letter asking them to authenticate their identity, and taxpayer response rates are low.
  4. some taxpayers wait too long to receive their identity protection personal identification numbers (ip pins), delaying their access to an underutilized tool for preventing id theft.

part of the problem is a flood of fraudulent tax returns. the economic impact payments and advance child tax credit programs opened the door to a horde of fake claims. in 2019, the irs received 92,631 claims for assistance through its identity theft victim, assistance (idtva) program. two years later, the number leaped to 328,591. the overload, worsened by the pandemic quarantine, drove up process cycle times from 117 to 279 days. by 2023, it was 556 days – more than a year and a half.

the situation wasn’t bad enough in 2023, so the irs moved 572 identity theft agents to phone duty.

a good question

the problem is aggravated even more by the taxpayer protection program that identifies returns possibly filed by identity thieves. trouble is, the software is wrong more than half the time, though in 2022, it was only 47 percent wrong.

when a return gets flagged, the irs sends a letter (just one) to the real taxpayer asking for authentication online, over the phone or at a taxpayer assistance center. in 2022, 4.8 million letters were sent out.

but is it that easy? apparently not. taxpayers have taken an average of 46 days to authenticate themselves. more than half of the letters get no response.

why does it take so long? good question.

  • do taxpayers not understand the one letter they receive? (seems likely.)
  • is the online process too complicated? (pretty safe bet.)
  • too hard to get an appointment at a tac? (ditto.)
  • did they not get the letter, or not open it, or lose it or forget about it? (could be.)
  • good old american procrastination? (it happens.)

the irs doesn’t know the answer, but at least it’s trying to find one. it’s working with the taxpayer advocacy service to develop a survey. it should be done pretty soon. before too long, anyway. probably.