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Unreasonable: IRS takes too long to resolve identity theft cases

An independent regulator within the IRS reported on Wednesday that while taxpayer benefits had improved significantly, the Agency is still too slow to solve identity theft cases, with delays that “unscrupulous.”

Overall, the 2024 tax filing season went smoothly, according to the National Taxpayer Advocate’s latest report to Congress, especially after the IRS announced a massive financing boost The Democrats’ Inflation Reduction Act, which President Joe Biden signed into law in August 2022, is intended for this purpose.

“I don’t want to overdramatize, but I think we’ve moved over the last four years from a situation of despair to one of hope and optimism for the future of the agency and therefore for taxpayers,” said Erin M. Collins, who heads the organization designed to protect taxpayers’ rights. the Taxpayers’ Bill of Rights.

Still, she said, “The IRS’s delays in resolving cases where victims of identity theft have received assistance are unacceptable.”

The report details, among other things, how the Internal Revenue Service has performed in modernizing its technology, how quickly it answers calls and the rate at which it sends out refund checks.

The time it takes to resolve self-reported identity theft cases has increased even further since the last report in January, when it was nearly 19 months.

By April, the IRS had taken more than 22 months to resolve these cases and had about 500,000 unresolved cases in its inventory, according to the report.

Victims of identity theft can suffer further harm because they often have to deal with other related problems. For example, tax refunds can be delayed, contributing to financial insecurity.

“These delays are particularly problematic for low-income taxpayers who may rely on these refunds to pay their daily living expenses or expenses that arise throughout the year, such as medical bills. In addition, these victims of identity theft may have difficulty obtaining certain types of credit, such as mortgages,” the report said.

In response to Wednesday’s report, the IRS said in an emailed statement: “While taxpayers continue to see major improvements from the IRS during the 2024 tax season, the IRS recognizes that the backlog of identity theft cases continues to represent one of the largest ongoing service gaps.”

The agency is working on improvements, the statement said. This includes “identifying, training, and providing additional resources to handle these important cases” and “working with stakeholders inside and outside the IRS to identify and prevent the evolving threats of tax-related identity theft.”

The IRS originally received $80 billion in funding under the Inflation Reduction Act, but those funds are vulnerable to possible cuts.

Last years Debt ceiling and agreement on budget cuts The dispute between Republicans and the White House ended with the cutting of $1.4 billion from the agency and a separate agreement to deduct $20 billion from the IRS over the next two years and use those funds for other, non-defense-related programs.

Additional money for the IRS has been politically controversial since 2013, when it was revealed that the agency had been scrutinizing political groups applying for tax exemptions during the Obama administration. A report by the Treasury Department’s internal audit office found that both conservative and liberal groups were under scrutiny.

“I believe the IRS has turned the corner with the additional multi-year funding provided by the Inflation Reduction Act, particularly for taxpayer services and information technology modernization,” Collins said.

“I am confident that the taxpayers’ situation will continue to improve and develop.”

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