People walk past the U.S. Internal Revenue Service (IRS) building on November 14, 2025 in Washington, DC, USA.
Elizabeth Franz | Reuters
Victims of identity theft are facing “unconscionable” delays at the Internal Revenue Service, causing headaches and financial hardship for many Americans amid deep staffing cuts at federal agencies, according to a report to Congress released Wednesday by the National Taxpayer Advocate, the IRS’ internal watchdog agency.
According to the report, more than 500,000 tax-related identity theft victims are currently awaiting resolution from the IRS. The report says it currently takes authorities about 20 months, or almost two years, to solve cases.
Tax-related identity theft occurs when someone uses a stolen taxpayer’s Social Security number to file a tax return to claim a fraudulent refund.
This can create a series of administrative and financial issues for taxpayers, including the refund of temporarily withheld taxes.
“For many low- and moderate-income taxpayers, waiting nearly two years for a refund is not just an inconvenience, it can mean missing out on rent, utilities, transportation, and other basic living expenses,” Erin Collins of the National Taxpayer Advocate said in the report.
“For all taxpayers, this process delay is frustrating, burdensome, difficult to navigate, and time-consuming,” she wrote.
The IRS did not respond to requests for comment.
Mr. Collins oversees the Taxpayer Advocate Service, an independent organization within the IRS that acts as a watchdog for consumers. Former Treasury Secretary Steven Mnuchin appointed Collins in 2020 during the first Trump administration.
U.S. tax law requires the National Taxpayer Advocate Board to submit two reports to Congress each year.
This is its first report and outlines advocacy goals for the coming year, one of which is taxpayer identity theft.
The report comes as Elon Musk’s so-called Department of Government Efficiency (DOGE) continues to make significant cuts to the IRS’ workforce, including cuts in 2025.
Collins wrote that the agency will have 74,000 employees at the start of the 2026 tax filing season, down 27% from 102,000 employees in the same period last year.
Mr Collins for the first time warned of significant delays due to taxpayer identity theft in 2023. Since then, the number of victims has only increased, and so have the waiting times. In fiscal year 2023, the IRS had a backlog of about 484,000 cases that took about 19 months to resolve, Collins wrote at the time.
In recent years, the number of Americans reporting tax-related identity theft to federal regulators has increased.
Last year, the Federal Bureau of Investigation said it saw a 26% year-over-year increase in consumer complaints related to “criminals” who steal taxpayers’ identities to file false tax returns or fraudulently claim refunds.
