IRS Improves Resolution Times for Identity Theft Cases

IRS Improves the Timeline Needed to Resolve Identity Theft Cases

 

Identity Theft Problems

Identity Theft Problems

The problem

Identity theft victims have to endure major delays in receiving their income tax refunds. Additionally, these refunds commonly have many mistakes that further lengthen the time in which it takes to receive the refund. This is according to several governmental agencies that have devoted research to the subject. The delays and errors compound an often trying situation for the victims of identity theft and tax fraud. The issue has been gaining widespread attention lately.

An internal audit of the IRS in recent years revealed that the IRS lacked severely in customer service issues. Customer service is important because it relates the pertinent information that allows victims of this type of fraud to swiftly report and repair the issue. The audit was done to determine the effectiveness of recent IRS customer service changes. These changes were designed to improve the system greatly, but a system for measuring success was not in place.

The Supposed Resolution

The IRS takes almost 300 days to resolve the issues of victims of identity theft. However, they claim that this is an improvement over the previous 312 days that it took to resolve the same issues previously. Additionally, this time is predicated on the time it takes to rectify the situation. It does not take into account the time that it takes to formally alert the IRS of the problem. This adds a significant amount of time to the process. Some people report that their return issues were not rectified for a year’s time or more. These issues with the length of time have not been improved much.

The Reality

It is noted that innocent taxpayers bear the brunt of the financial hardships when this type of fraud is committed. The people that commit the fraud and the government’s slow response are not often penalized in the process. This means that a significant portion of the relief that these innocent taxpayers could receive can be from the government’s end. A start to this relief could come in the form of a rapid response and resolution from the government itself. This is especially true because these taxpayers help fund the system in which they are receiving no relief.

Additionally, the study reports that the IRS continues to make errors even with the repaired returns. This exponentially compounds the problem and often starts the entire 300 day process again. Ten percent of the over quarter-million people whose returns were defrauded contained punitive errors on their return. These taxpayers suffer the most from the ineptitude that the system displays. This represents over 25,000 returns, and the hardship is compounded exponentially. The problem could be greatly reduced with an effective response from the IRS both in thwarting the fraud and refining the process that governs the rectification of that fraud.

The number of these issues have reported by the IRS are also reported to be flawed when their metric for determining the numbers is utilized. This includes errors in reporting the time period consumed in processing these returns. It also includes errors in reporting the time period for resolution. This study proved that the IRS reported that the time for rectifying fraud issues only took 6 months. That is 180 days that the government is reporting compared to the 278 days that the study proves that returns actually took to be rectified and issued. This also speaks to the defrauded taxpayer’s frustration and complaints about the process.

 

Resolutions

Resolutions

Resolution? Maybe

Recommendations that have been made from credible authorities include that the IRS should develop the appropriate procedures and processes that will ensure that the actions that it takes to resolve the issues and the adjustments required to correct the issue are made accurate. This means accurately calculating the time that it takes to actually resolve the issues of taxpayer’s that have been damaged by the fraud. It also suggests accuracy in reporting the actual number of fraud cases that have been resolved because the IRS rectified their issues and issued a refund. Because the figures are conflagrated, the numbers that are actually resolved, the number that needs a resolution, and the time that all this will actually take is falsely reported.

 

Tax ID Theft

Tax ID Theft

The IRS concurs with the findings, but only in part. They accepted the first three recommendations that were issued by the study. However, many of the other recommendations the IRS did not agree with or determine that they will even address. This includes re-calculating the time that it takes to resolve the defrauded accounts fully. Their procedures and processes that are currently in place will remain their method of calculating the complete time for resolution. This means that the IRS will continue to skew the actual time of resolution by as much as 5 months. It also means that taxpayers that have to endure the process will continue to receive false information from their government. This will certainly continue to be a major cause of the poor customer service ratings that they are receiving.

 

About the Author:

Hi, I’m a Tax Professional based in California. I love to discuss Tax and Accounting issues. I’m an entrepreneur fundamentally, and like folks who desire to create business enterprises and add to the economy. I trust you enjoyed my blog post. Please do not hesitate to give me reviews.

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