Internal Revenue Service officials are giving “misleading” information to taxpayers who have been victims of identity fraud about how long they will have to wait for tax refunds.
The taxpayers are being told their wait could be as long as 180 days, the Treasury Inspector General for Tax Administration said in a report made public Thursday, but the IRS’s own records suggest the delay in getting refunds could be much longer.
The IRS’s “misleading” promise to individuals whose personal information has been used by someone else to file a fraudulent return “creates a false portrayal” of the agency’s attempts to improve a process already infamous for lengthy delays, the inspector general said.
Taxpayers had to wait an average of 278 days to see their cases resolved. In one instance, the IRS didn’t pay a taxpayer their full return for 762 days, or well more than two years.
A major factor in the protracted process is that incoming cases are often assigned to seven different IRS officials before they can be resolved. Consequently, identity fraud cases languished at the IRS for an average of 254 days without any progress being made as they were shifted from desk to desk.
What’s more, the IRS “significantly inflates and overstates the number of taxpayers assisted” by ignoring the fact that a single individual’s taxes often give rise to multiple cases.
In 2013, the IRS reported helping 862,081 taxpayers when it in fact assisted just 602,728. The agency also did not deliver the correct return amount in nearly one in five cases.
A September 2013 inspector general report highlighted the same “significant delays” taxpayers faced when attempting to get their returns after falling prey to identity thieves.
That review discovered the average individual waited 312 days to receive their money, and that cases collected dust for an average of 277 days while IRS officials shuffled those cases around.
The 2013 report, which examined a period between August 2011 and July 2012, first uncovered the IRS’s tendency to mislead victims of identity theft.
“IRS assistors were instructed to inform taxpayers who inquire about the status of their identity theft case that the time period for resolving their case would be 180 days,” the report said. “The IRS’s own documentation showed that the actual number of days it took to resolve identity theft cases ranged from 228 to 298 days.”
Go here to read the full IRS inspector general report.
