Taxpayers who had cases of tax identity theft resolved in fiscal year 2013 experienced significant delays and errors in refunds, according to a report issued Thursday by the Treasury Inspector General for Tax Administration, an official Internal Revenue Service watchdog known as Tigta.  The IRS took an average 278 days—roughly nine months—to resolve the identity-theft cases in fiscal 2013, Tigta said. That is far longer than the IRS’s estimate at the time of 180 days, or about six months.  In making the determination, Tigta examined what it said was a statistically valid sample of 100 cases. It said 10% of those cases may have been incorrectly resolved, causing further delays or an incorrect refund check to be sent to a victim.  Taxpayer identity theft occurs when a criminal uses the personal information of a taxpayer to file a fraudulent return claiming a tax refund. The crime often imposes significant financial and emotional hardships on victims, some of whom must wait months to receive tax refunds they are due. The IRS assisted 875,000 victims of tax ID theft in fiscal year 2014.  In response to the Tigta report, the IRS said in a statement that it has made many improvements in the handling of tax identity theft cases since then, and that it stands by its lower current estimate of 120 days, or roughly four months, as the average time to resolve a case.  The IRS also took issue with Tigta’s methodology, saying the sample wasn’t truly representative because it included only taxpayers who were due refunds. In addition, the agency said Tigta didn’t take into account improvements in the handling of tax ID theft cases recommended by Tigta in 2013 and adopted by the IRS.  The 278-day average time to resolve an identity-theft case in fiscal 2013 was an improvement over the average of 312 days found in a similar study the prior year, the Tigta report said.  IRS Tackles Tax Identity Fraud (March 19, 2015)  Protect Yourself From Tax Identity Theft (Feb. 27, 2015)
A federal watchdog looked at 100 cases resolved in fiscal 2013. The IRS challenged the findings, and said the process now takes about four months.