Identity Theft Processing Delays

[Lee B]

Copied from the Tax Advocate's Mid Year Report to Congress:

"One longstanding filing season challenge that remains unresolved is lengthy delays in resolving identity theft cases. There are two categories of identity theft cases. One involves returns that IRS return processing filters flag as potential identity theft; the IRS flagged about 2.1 million such returns. In these cases, the IRS sent a letter to taxpayers notifying them they had to authenticate their identities before receiving their refunds. The IRS typically takes several months to resolve these cases.

In the second category of identity theft cases, a thief has stolen a taxpayer’s identity and filed a tax return using the taxpayer’s name and Social Security number. These taxpayers are victims and may also be experiencing the effects of identity theft beyond the context of their tax returns. Their cases are referred to the IRS’s Identity Theft Victim Assistance (IDTVA) unit for resolution.

As of the end of the filing season, the IRS had about:

387,000 IDTVA cases in inventory, and

the cases were taking an average of about 20 months to resolve.

“These delays disproportionately affect vulnerable populations dependent on their refunds to meet basic living expenses,” the report says. In fiscal year (FY) 2023, 69% of affected taxpayers had adjusted gross incomes at or below 250% of the Federal Poverty Level."

Sometimes my mind really struggles to understand this stuff

[Abby Normal]

20 months?!?! 

[TexTaxToo]

Well, it was finally improving (at least for the moment) - down from 22 months:

[Lion EA]

On 16 April I heard from our CT Stakeholder Liaison that he'd accepted Deferred Resignation and expected to be put on administrative leave shortly while being paid through September.

By 9 May I heard from new Stakeholder Liaisons in NY (2) and NJ who are covering the northeast.

I think CT's Liaison (who was great, by the way!!) was gone by 30 April. Probably the same end-date for the former NY and NJ Liaison's.

[Sara EA]

Was that still Joe McCarthy?  He was indeed great, very helpful and so funny that no one fell asleep during his portion of a seminar.  He once told those "who have never been in an IRS return processing" campus, they really do take all the staples out and have papers scattered over the floor, which is why they request the same docs three or four times.  His wife was an IRS agent.  If she still was, maybe she's been downsized too.  Tough to have both breadwinners in a family unemployed.  And it's the IRS's and our loss to have so much expertise dismissed.

[Lion EA]

It was Joe McCarthy. He was indeed great. I think he said his wife took the deferred resignation, also, but I'm not sure I remember. She prosecuted the Son of Boss or one of those schemes. They're both wicked smart and probably saved well for retirement or have already found consulting jobs. I hope they go into tax teaching.

[Lion EA]

Here's Joe's letter to us in the NY/CT-ATP:

Dear Tom and Rita,

Due to significant staffing reductions at the IRS in general and in Stakeholder Liaison in particular, I have decided to leave the IRS under a deferred resignation program. You might have heard this program referred to in the press as “the fork in the road”. This means that while I will still technically be an IRS employee until the end of September I will soon be placed on administrative leave and be unable to perform any of my official job duties.

Before I leave the IRS, I just wanted to let you know that it has been my absolute pleasure to work with you over the years. As I always say … working with tax practitioners is (and always has been) the very best part of my job!

I am looking forward to the next phase of my life and I wish you all the best in the future.

Also, due to the significant staffing reductions, I am not sure who if anyone will be taking my place. If you wish to contact Stakeholder Liaison in the future I suggest you use the contact information in the following link: https://www.irs.gov/businesses/small-businesses-self-employed/stakeholder-liaison-local-contacts

Feel free to share this information with your members.

Most sincerely,

Joe McCarthy CPA
IRS Senior Stakeholder Liaison

150 Court Street, 5th Floor

New Haven, CT 06510

203.415.1015