Advocate: IRS efforts on identity theft lacking

The IRS needs to streamline its efforts to support victims of identity theft, a new report from a government watchdog says.

In its annual report to Congress, the National Taxpayer Advocate said that the number of tax-related identity thefts had skyrocketed in recent years, with more than six times as many occurring in fiscal 2012 as in 2008. 

And while the IRS said in 2008 that it wanted to offer a “seamless process” to victims, Nina Olson, the taxpayer advocate, says in her report that the IRS has created units to deal with identity theft in 21 separate departments.

IRS employees, the report found, also tell those with identity theft complaints that their case will take six months to resolve. 

“Taxpayers need ‘one-stop shopping’ — a single point of contact they can work with to resolve all issues in their cases — and the IRS needs a ‘traffic cop’ to make sure that all units complete their actions and that parts of cases do not fall through the cracks,” Olson said in a statement. 

In her report, Olson also said that IRS efforts to combat identity theft have been hamstrung by funding issues. But the taxpayer advocate also asserted that the agency could be more productive with its available resources. 

The IRS has defended its efforts on identity theft, with Doug Shulman, the recently departed commissioner of the agency, saying last year that the IRS had “implemented new filters to detect fraudulent returns and new processes for handling returns.”

“These efforts have paid off,” Shulman said in September. “This year to date, we have stopped $15 billion in fraudulent payments from going out the door as compared to $11 billion over the same period last year.”

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