The IRS is dealing with a large backlog of identity theft cases, affecting taxpayers across the U.S. This issue has serious implications, especially for those with low incomes who rely on tax refunds.
The Importance of Addressing the Backlog:
The backlog of unresolved identity theft cases at the IRS is causing delays in tax refunds, particularly impacting low-income taxpayers who depend on timely refunds for essential expenses.
Erin Collins’ Perspective:
Erin Collins, the National Taxpayer Advocate, highlights the challenges faced by the IRS in handling identity theft cases. While improvements have been made, significant hurdles remain in updating technology and improving processes.
How Identity Theft Affects Tax Filings:
Identity theft occurs when someone uses another person’s information to file a fake tax return, leading to delays as the IRS verifies legitimate filings, leaving victims without refunds for over 22 months.
The Impact on Low-Income Taxpayers:
Many affected taxpayers in 2023 had incomes near or below 250% of the federal poverty level, making them vulnerable to financial strain due to delayed refunds essential for daily needs.
IRS Call Handling Issues:
During the 2024 filing season, IRS call response rates were low, with many calls unanswered due to system issues, impacting taxpayer assistance during crucial filing periods.
Funding and Optimism for the Future:
Recent legislation allocated substantial funds to the IRS for system upgrades and taxpayer services, aiming to improve efficiency and resolve identity theft cases more promptly.
Recommendations for Improvement:
Collins suggests better resource management and additional funding to help the IRS process identity theft cases faster, ensuring timely refunds for taxpayers.
While progress has been made, the IRS faces significant challenges in resolving identity theft cases promptly. Continued efforts in modernization and resource allocation are crucial for improving service delivery to taxpayers.