IRS Backlogs May Affect Processing of Identity Theft Cases

 Posted on September 23, 2026 in Taxation Law

Identity theft is an issue that has affected many people in the United States. It can occur when someone has obtained another person’s identifying information and used it to access their financial accounts, take out loans in their name, or engage in other illegal behavior. The IRS may address identity theft in which a person has filed a tax return in someone else’s name in order to obtain a fraudulent refund. People who have been affected by identity theft can take steps to address the issue with the IRS, but a large backlog of cases has affected people’s ability to resolve these matters quickly.

Legal help from an attorney can be beneficial for people who have been affected by identity theft. A lawyer who understands how to work with IRS officials and address concerns related to tax law can take steps to ensure that cases can be processed more quickly, and they can advocate for solutions that will protect a taxpayer’s rights and interests.

Report Reveals Long Processing Times When Resolving Issues Related to Identity Theft

The Treasury Inspector General for Tax Administration (TIGTA) recently released a report detailing findings related to the IRS’s processing of identity theft (IDT) cases in which people’s names and Taxpayer Identification Numbers have been used to file fraudulent tax returns. The IRS’s Identity Theft Victim Assistance (IDTVA) organization reviews identity theft cases, including identity theft that has been reported by taxpayers and tax returns that have been flagged because of possible identity theft. Unfortunately, due to a large number of cases, taxpayers may be left waiting for their cases to resolve.

The TIGTA report found that between 2020 and 2021, the number of identity theft cases reported to IDTVA nearly quadrupled from around 87,000 to around 330,000. This increase was likely related to the COVID-19 pandemic, and a large number of cases continues to be reported each year. This has led to a large backlog of cases as the IRS works to resolve these matters.

While letters sent to taxpayers by the IRS state that identity theft are generally processed within 120 days after they are reported, the backlog has led to a large increase in the time needed for these cases. As of June 2025, IDTVA reports that claims take an average of 582 days to process. In addition, the TIGTA report took a sample of cases closed in 2023, and it found that on average, they took 655 days to close. These long processing times can cause problems for taxpayers who are waiting to receive refunds.

One of the key issues in these matters involves how long it takes before cases are assigned to assistors such as IRS Customer Service Representatives or Tax Examiners. After cases are assigned, they will typically be resolved within 30 days. However, cases are handled in the order in which they are received, and the delay before they can be assigned to an assistor is one of the primary reasons for long processing times.

Taxpayers may also encounter concerns related to notifications from the IRS about identity theft cases. Under the Taxpayer First Act (26 U.S. Code § 7529), taxpayers have the right to be informed as soon as is practicable after the IRS makes a determination that identity theft may have occurred. Notifications from the IRS can provide taxpayers with instructions on how to report identity theft to law enforcement and how they can protect themselves from harm due to the use of their identifying information.

The TIGTA report found that the IRS did not consistently send notifications to taxpayers in identity theft cases. In around 32% of the cases reviewed, the IRS did not send acknowledgement letters to taxpayers informing them about cases that had been opened. In 52% of cases where acknowledgement letters were sent, taxpayers were not notified until more than 100 days after cases were received by IDTVA. Taxpayers did receive closing letters informing them about how their cases had been resolved in 98% of cases.

Contact Our San Jose Tax Lawyer

When a taxpayer has been affected by identity theft, they may encounter complications when filing tax returns, and their ability to receive a tax refund may be delayed. Taking steps to resolve these issues quickly can help ensure that a taxpayer’s financial interests will be protected. At John D. Teter Law Offices, our San Jose, CA tax attorney can help clients report identity theft to the IRS and communicate with IRS officials to ensure that cases will be handled correctly. Reach out to our firm at 408-866-1810 to set up a consultation.