Key Takeaways
- Tax identity theft can take 19 to 20 months to resolve on average, despite the IRS’s stated 120-day goal, because of significant case backlogs.
- The process typically involves reporting the identity theft, verifying your identity, investigating the fraudulent return, correcting your IRS account, and processing your legitimate return or refund.
- Cases can take longer when multiple tax years or fraudulent returns are involved, additional documentation is required, or identity verification is unsuccessful.
- Tax identity theft can delay your tax refund for weeks or months while the IRS investigates the fraudulent filing and verifies your identity.
- If someone files a return using your SSN, respond promptly to IRS notices, follow identity verification instructions, and file your legitimate return as directed.
- An IRS Identity Protection PIN (IP PIN) can help prevent someone from using your SSN or ITIN to file a federal tax return in the future.
Tax identity theft can take a long time to resolve. The IRS’s stated goal is 120 days, but current IRS and Taxpayer Advocate Service data show actual resolution times running far longer, with the national average now around 19 to 20 months and currently trending longer for identity theft victim assistance cases.
How long it takes to fix tax identity theft depends on several factors, including how the identity theft was discovered, whether the IRS has already identified a suspicious return, whether you need to verify your identity, whether multiple tax years are affected, and whether additional documentation is required.
For taxpayers, the process typically involves identifying the fraudulent activity, verifying your identity with the IRS, correcting the fraudulent return or account information, processing your legitimate tax return, and releasing any refund you are owed. Taking action quickly and responding promptly to IRS requests can help prevent avoidable delays.
How Long Does It Take to Fix Tax Identity Theft?
There is no single timeline for every tax identity theft case, but taxpayers should generally expect the process to take several months rather than several days, particularly when the IRS must conduct a detailed review of fraudulent tax activity.
What Is the Typical Tax Identity Theft Timeline?
It’s worth understanding that “tax identity theft” actually covers two different situations with two different timelines. If the IRS’s fraud filters simply flag your own return as suspicious — triggering a letter like 5071C, 4883C, or 5747C — resolving it is usually a matter of weeks once you complete identity verification. The 19-to-20-month average wait applies to a more serious scenario: cases where a thief has already filed a fraudulent return using your Social Security number before you filed your own. These cases go to the IRS’s Identity Theft Victim Assistance (IDTVA) unit, and it’s this backlog — over 500,000 cases as of the IRS’s most recent reporting — that is currently running 19 to 20 months to resolve.
The Taxpayer Advocate Service has also highlighted lengthy processing times for Identity Theft Victim Assistance cases. This means the length it takes to fix tax identity theft issues can vary significantly from one taxpayer to another.
A relatively straightforward case may move through the process more quickly, while a case involving multiple fraudulent returns, conflicting information, additional documentation, or several affected tax years may take substantially longer.
What Can Make Tax Identity Theft Take Longer?
Several factors can affect how quickly an identity theft case is resolved. The process may take longer if a fraudulent tax return has already been filed, if the taxpayer must complete identity verification, or if the IRS needs additional documentation. Cases involving multiple tax years or multiple fraudulent returns can also require more extensive review.
The status of the taxpayer’s legitimate tax return can also affect the timeline. For example, someone whose legitimate return was rejected because a fraudulent return was already filed may have additional steps to complete before their return can be processed.
IRS workload and processing backlogs can also affect the amount of time a taxpayer waits for a resolution. Because of these variables, taxpayers should be cautious about relying on a specific number of days as a guaranteed resolution date.
What Happens After You Report Tax Identity Theft to the IRS?
Once tax identity theft is reported or identified, the IRS must determine what happened, verify the legitimate taxpayer’s identity, correct the affected tax account, and make sure the legitimate return is properly processed.
Step 1: The IRS Identifies or Receives a Report of Identity Theft
Tax identity theft can come to light in several ways. You may discover it when your electronic tax return is rejected because a return has already been filed using your Social Security number. You might also receive an IRS notice telling you that a suspicious return was filed using your information.
In some cases, the IRS identifies a suspicious return before the legitimate taxpayer realizes anything is wrong. The IRS Taxpayer Protection Program may send a letter asking the taxpayer to verify their identity and information from the tax return.
The IRS uses several identity theft-related notices, including Letter 5071C, Letter 4883C, Letter 5747C, and Letter 5447C. The specific notice you receive determines what steps you need to take.
Step 2: You Verify Your Identity
Identity verification is one of the most important steps in the process. The IRS needs to establish that the person responding to the identity theft issue is the legitimate taxpayer before it can make certain changes to the account or process a return.
Depending on the notice, verification may take place online, by telephone, or in person at a Taxpayer Assistance Center. Taxpayers should follow the instructions provided in their specific IRS letter.
You may need information such as your IRS notice, a prior-year tax return, the tax return referenced in the notice, and government-issued identification. If you cannot successfully verify your identity through the initial process, the IRS may require an in-person appointment.
Step 3: The IRS Determines Whether You Filed the Return
After verifying your identity, the IRS needs to determine whether you actually filed the return in question.
If you confirm that you did not file the return, the IRS can remove the fraudulent return from your tax records. If you did file the return, the IRS can allow it to continue processing as long as there are no other issues preventing processing.
This distinction is important because not every suspicious return is necessarily fraudulent. The IRS must establish what happened before correcting the account.
Step 4: The IRS Corrects Your Tax Account
When the IRS confirms tax-related identity theft, its Identity Theft Victim Assistance organization works to research and resolve the case.
The IRS may need to determine whether the identity theft affects one or multiple tax years and whether additional fraudulent returns are associated with the taxpayer. The agency may also remove fraudulent returns, properly process the legitimate return, and release a refund when appropriate.
Step 5: Your Legitimate Return and Refund Are Processed
Resolving identity theft and processing a tax refund are related but separate parts of the process. Even after the fraudulent return has been addressed, your legitimate return may still need to complete normal IRS processing. Additional review can also affect the timing of a refund.
This is why a taxpayer may receive confirmation that an identity theft issue has been addressed but still have to wait for a refund.
Why Does Tax Identity Theft Take So Long to Fix?
Tax identity theft takes time because the IRS has to protect the taxpayer’s account while determining which tax information is legitimate.
IRS Identity Verification Takes Time
The IRS cannot simply assume that a taxpayer who contacts the agency is the legitimate owner of a Social Security number. Identity verification is designed to prevent criminals from gaining access to tax accounts or using the identity theft process to commit additional fraud.
If verification is unsuccessful, the process can become more complicated and may require additional documentation or an in-person appointment.
The IRS Must Investigate Fraudulent Tax Returns
A fraudulent return must be identified and separated from the legitimate taxpayer’s records. The IRS may need to determine what information was submitted, whether other tax years were affected, and whether additional fraudulent activity is associated with the taxpayer. This review is one reason tax identity theft cannot always be corrected immediately.
Multiple Tax Years Can Complicate the Case
Identity theft does not necessarily happen only once. A criminal who has obtained someone’s personal information may attempt to file fraudulent returns for multiple years.
When more than one tax year is affected, the IRS may need to research and correct multiple returns or account records. That can make the case more complicated than a single-year identity theft incident.
Missing Information Can Cause Additional Delays
Taxpayers can help avoid unnecessary delays by responding completely and promptly to IRS requests. For example, if the IRS sends a letter requesting identity verification and the taxpayer does not respond, the affected return may remain on hold. Responding quickly and providing the requested information can help keep the case moving.
What Should You Do If Someone Filed a Tax Return Using Your SSN?
If someone filed a tax return using your Social Security number, take action as soon as you discover the problem.
Check Your IRS Account and Tax Records
Review your IRS account and available tax records for activity you do not recognize. Potential warning signs include an IRS notice about a return you did not file, an electronic return being rejected because a return was already filed, unfamiliar income reported under your Social Security number, unexpected IRS correspondence, or an unfamiliar tax balance.
A rejected electronic return does not by itself prove identity theft, but it is an important reason to investigate.
Respond to IRS Notices Promptly
If the IRS sends you an identity theft notice, follow the instructions in that notice. The IRS specifically advises taxpayers who receive an identity theft letter to complete the identity verification process described in the correspondence.
Do not ignore an identity theft notice simply because you believe the fraudulent return is obvious. The IRS needs your response to move the case forward.
File Your Legitimate Tax Return
If you have not yet filed your legitimate tax return, you generally should not wait indefinitely for the identity theft issue to be resolved before taking care of your own filing obligations.
If your electronic return is rejected because someone already filed using your Social Security number, you may need to follow IRS instructions for filing a paper return.
The IRS says taxpayers who learn they are victims of tax-related identity theft may need to file a paper return and, when appropriate, attach Form 14039 to the return. However, taxpayers should first determine whether the IRS has already identified the issue or instructed them to use its identity verification service because most people do not need to file Form 14039.
Consider Reporting Broader Identity Theft
Tax identity theft may be only one part of a larger identity theft problem. If your Social Security number or other personal information has been compromised, consider taking appropriate steps to protect your credit and financial accounts. These may include reviewing your credit reports, placing a fraud alert or credit freeze when appropriate, and reporting broader identity theft through the Federal Trade Commission’s identity theft resources.
Will Tax Identity Theft Delay Your Tax Refund?
Tax identity theft can delay a refund because the IRS may need to verify your identity and investigate the fraudulent filing before processing your legitimate return.
Why Does Identity Theft Delay Tax Refunds?
If a criminal files a fraudulent return using your Social Security number, the IRS may place your legitimate return on hold while it determines which filing belongs to you.
For example, imagine that Sarah is due a $4,000 refund. Before she files, a criminal uses her Social Security number to submit a fraudulent return claiming a refund. When Sarah attempts to e-file, the IRS system rejects her return because a return has already been filed under her SSN.
Sarah now has to establish that she is the legitimate taxpayer, address the fraudulent filing, and get her legitimate return processed. Her $4,000 refund could therefore take much longer than it would under normal circumstances.
How Long Can an Identity Theft Refund Delay Last?
There is no universal refund-delay period for identity theft cases. Tax identity theft can add weeks or months to the process. Once identity verification is completed, additional review may still be required before the legitimate return is processed and a refund is issued.
The IRS’s identity theft guidance also makes clear that the overall case timeline can vary significantly. Current identity theft backlogs have contributed to longer processing times for some taxpayers.
How Do You Know If Someone Filed Taxes in Your Name?
Several warning signs can indicate that someone has used your identity to file a tax return.
Common Signs of Tax Identity Theft
Potential warning signs include an IRS notice about a return you did not file, a rejected e-filed tax return because a return was already submitted, unfamiliar income on your IRS records, an unexpected tax balance, or multiple returns associated with your Social Security number.
You should investigate these signs promptly rather than assuming they are simply administrative errors. In some cases, the IRS may identify fraudulent activity before you do, which is why reviewing your IRS account and tax records can be helpful.
How to Prevent Tax Identity Theft From Happening Again
Once you resolve tax identity theft, protecting your tax account should become an ongoing priority.
Get an IRS Identity Protection PIN
An Identity Protection PIN, or IP PIN, is a six-digit number that helps prevent someone else from filing a federal tax return using your Social Security number or Individual Taxpayer Identification Number.
The IRS says confirmed tax-related identity theft victims are placed into the IP PIN program and receive a new six-digit PIN each year. The IRS also encourages taxpayers to voluntarily opt into the program.
An IP PIN does not eliminate every form of identity theft, but it provides an important additional layer of protection for federal tax filings.
Secure Your IRS Online Account
Use strong, unique credentials and available security features when accessing your IRS online account. Avoid sharing login information with anyone who does not need it and be particularly cautious about emails or text messages asking for tax account information.
Protect Your Social Security Number
Your Social Security number can be valuable to identity thieves beyond tax fraud. Avoid providing it unnecessarily and be cautious about where you store documents containing your SSN. Taxpayers should also be suspicious of unexpected requests for sensitive information.
Watch for Tax-Related Scams
Criminals may impersonate the IRS through phone calls, emails, text messages, or fake websites. The IRS generally initiates identity theft verification through official correspondence. If someone unexpectedly contacts you demanding immediate payment or sensitive tax information, verify the communication through an official IRS channel rather than responding directly.
What If the IRS Hasn’t Resolved Your Tax Identity Theft Case?
If your case has been pending for a long time, keep your documentation organized and make sure you have responded to every request from the IRS.
Check Whether the IRS Needs More Information
Review your recent IRS correspondence and make sure you have completed any requested verification or documentation.
The IRS advises identity theft victims to respond promptly to requests for information. At the same time, the agency warns taxpayers not to submit duplicate Forms 14039 because duplicate submissions can cause additional delays.
Keep Records of Your Case
Maintain copies of:
- IRS notices
- Tax returns
- Form 14039, if applicable
- Identity verification documents
- Documentation you submitted
- Dates of communications with the IRS
- Information about fraudulent returns
- Refund information
Having a complete record can make it easier to explain the situation if another IRS issue develops.
Follow Up When Appropriate
The IRS specifically advises taxpayers who have filed Form 14039 not to repeatedly submit duplicate forms or contact the IRS simply to ask for the status of the identity theft claim, because doing so can cause delays. Taxpayers can instead check the IRS’s processing-status information for applicable forms.
If an identity theft-related issue has created a separate tax balance or collection problem, however, carefully review the notice and follow its instructions.
How Optima Tax Relief Can Help
If tax identity theft has resulted in an incorrect IRS tax balance, penalties, interest, or collection activity, you may need more than help correcting the fraudulent return. Optima Tax Relief can help taxpayers understand their tax debt and explore potential tax relief options based on their individual circumstances. Depending on eligibility, potential solutions may include an Offer in Compromise, installment agreement, penalty abatement, or Currently Not Collectible status.
If you’re facing IRS collection activity because of a tax debt connected to identity theft, it’s important to address the underlying issue and understand what relief options may be available. Optima Tax Relief can review your tax situation, help determine whether you qualify for available tax resolution programs, and work toward resolving your outstanding IRS debt.
Frequently Asked Questions
How long does it take to fix tax identity theft?
Tax identity theft typically takes far longer than most people expect. While the IRS’s stated goal is 120 days, its own data and the National Taxpayer Advocate’s most recent report to Congress both show the actual average is now closer to a year and a half to two years.
How long does IRS identity verification take?
The time required for IRS identity verification varies depending on the verification method and whether additional information is needed. Some taxpayers can verify their identity online, while others may need to verify by phone or in person.
Does tax identity theft delay your refund?
Yes. Tax identity theft can delay a refund because the IRS may need to verify your identity, investigate the fraudulent return, and process your legitimate return. Depending on the case, the delay can last weeks or months.
Tax Help for People Who are Facing Tax Identity Theft
Tax identity theft can take a long time to resolve, depending on the complexity of the case and the IRS’s processing workload. While the IRS’s stated timeframe is 120 days, current data shows the real-world average running closer to a year and a half to two years, driven largely by IRS staffing and processing backlogs rather than individual case complexity.
If you discover tax identity theft, respond promptly to IRS notices, complete any required identity verification, and keep records of your case. If the identity theft has resulted in an incorrect tax balance, collection notices, or other IRS problems, professional tax assistance may help you understand your options and work toward resolving the issue. Optima Tax Relief is the nation’s leading tax resolution firm with over $3 billion in resolved tax liabilities.
If You Need Tax Help, Contact Us Today for a Free Consultation.