Hundreds of thousands of taxpayers are having their refund requests rejected every year because their refund has already been paid out — just not to them. Stealing income tax refunds is the latest, and a fast-growing, wrinkle on the mounting problem of identity theft. By moving faster than the actual taxpayers, identity thieves are making off with billions.
The IRS has stated in the past that victims that have fallen prey to tax identity theft will have their case resolved within 180 days. This, however, runs contrary to an audit of tax accounts resolved in fiscal year 2013 by the Treasury Inspector General for Tax Administration. The administration found that identity fraud cases related to stolen tax refunds actually take an average of 278 days, or over 9 months, to be fully resolved.
In addition, the audit performed by the Treasury Inspector General found that nearly ten percent of cases are incorrectly resolved by the Internal Revenue Service! Cases that were improperly solved resulted in further delays for the victim in getting his or her refund. The audit stated that the range from when the IRS received a victims’ tax returns to the time that the IRS correctly paid out the refund happened anywhere from 16 to 762 days.
On the plus side, the Treasury Inspector General found that this delay of 278 days is 34 days better than the last audit performed by the administration in fiscal year 2012 when it took the IRS 312 days on average to properly conclude a case. This improvement likely doesn’t come as too much of a consolation for those who have fallen victim as 278 days is still a long time and can cause huge financial and emotional burden for victims who are in need of their refunds.
For its part, the Internal Revenue Service has stated that it currently doesn’t believe that it needs to make any changes to its procedures in calculating the time it takes to resolve a case.