People walk past the U.S. Internal Revenue Service (IRS) building in Washington, D.C., U.S., Nov. 14, 2025.
Elizabeth Frantz | Reuters
Victims of identity theft face “unconscionable” delays at the Internal Revenue Service, a dynamic causing headaches and financial hardship for many Americans that comes amid steep staffing cuts at the federal agency, according to a report to Congress published Wednesday by the National Taxpayer Advocate, an internal IRS watchdog.
More than 500,000 victims of tax-related identity theft are currently awaiting resolution from the IRS, the report said. The agency is currently taking about 20 months — nearly two years — to close their cases, according to the report.
Tax-related identity theft happens when someone files a tax return to claim a fraudulent refund by using a taxpayer’s stolen Social Security number.
It can set off a cascade of administrative and financial issues for taxpayers, including temporarily withheld tax refunds.
“For many low- and middle-income taxpayers, waiting nearly two years for a refund is not merely an inconvenience — it can mean falling behind on rent, utilities, transportation costs, and other basic living expenses,” Erin Collins, the National Taxpayer Advocate, wrote in the report.
“For all taxpayers, this delayed process is frustrating, burdensome, difficult to navigate, and time-consuming,” she wrote.
The IRS didn’t immediately return a request for comment.
Collins oversees the Taxpayer Advocate Service, an independent organization within the IRS that serves as a watchdog for consumers. Former Treasury Secretary Steven Mnuchin appointed Collins to the role in 2020 during the first Trump administration.
U.S. tax law requires the National Taxpayer Advocate to issue two reports to Congress each year.
This is the first of those reports, which outlines advocacy objectives for the upcoming fiscal year — one of which is taxpayer identity theft.
The report comes amid a deep workforce reduction at the IRS, including cuts from Elon Musk’s so-called Department of Government Efficiency, or DOGE, in 2025.
The agency employed 74,000 people at the beginning of the 2026 tax-filing season, a 27% reduction from the 102,000 employees a year earlier, Collins wrote.
Collins first warned of severe delays tied to taxpayer identity theft in 2023. Since then, the backlog of victims has only grown, as have wait times. In fiscal year 2023, the IRS had a backlog of about 484,000 cases and took about 19 months to resolve them, Collins wrote at the time.
There has been an uptick in the number of Americans reporting tax-related identity theft to federal regulators in recent years.
The Federal Bureau of Investigations last year saw a 26% year-over-year increase in consumer complaints tied to “criminal actors” stealing taxpayer identities to file false tax returns and fraudulently claim refunds, the agency said.
