Some federal politicians sanctimoniously seek voter approval by pushing new giveaway programs to select groups (like $25,000 to first-time home buyers). If they were sincere about wanting to help the most deserving among the least-well-off, they would instead prioritize getting earned refunds to the low-income victims of identity theft.
(p. B6) If a thief files a fraudulent return using your tax information and pilfers your refund, you’ll have to wait an average of 675 days to get the money rightfully owed to you, according to the Taxpayer Advocate Service, a group within the Internal Revenue Service that works on behalf of taxpayers.
“That period of time is just ridiculous,” Erin M. Collins, who leads the service, said in an interview.
For reasons not yet clear, Ms. Collins noted, many of those affected are lower-income tax filers, who often depend on tax refunds to cover basic living costs. Those filers often qualify for tax breaks for working families, like the earned-income tax credit, that can result in significant refunds.
“These are true victims,” Ms. Collins said. “The I.R.S. should be helping these people.”
About half a million tax returns are in limbo at the I.R.S. because of identity theft fraud, a spokesman for the Taxpayer Advocate Service said.
. . .
The lengthy processing time for identity theft returns can cause other problems, Ms. Collins said in the blog post, like difficulty applying for a mortgage. When taxpayers are flagged for identity theft, she said, the I.R.S. won’t send tax transcripts — a record of the filers’ income and tax information — directly to lenders. So taxpayers have to request the transcripts themselves and give them to the lender. The red tape delays the completion of their home loan applications.
Other issues can arise, such as when a taxpayer chooses to have a refund applied to a subsequent tax year but the I.R.S. hasn’t yet applied it because of an unresolved identity theft issue. The tax owed on the subsequent year then goes unpaid, and the I.R.S. system begins to send collection notices.
For the full commentary see:
(Note: ellipsis added.)
(Note: the online version of the commentary has the date June 14, 2024, and has the title “First a Victim of Tax Return Identity Theft, Then a 2-Year Wait for a Refund.” Where there are a couple of small differences in wording, the passages quoted above follow the online version.)
The blog post by Collins mentioned above is: