Identity theft victims waiting on the IRS to fix their tax accounts and release a refund took 20 months on average to get their cases resolved between fiscal 2023 and 2025, more than five times the agency’s own 120-day goal, the Treasury Inspector General for Tax Administration found. Over that same three-year stretch, the IRS paid out $124.2 million in interest on the refunds those delays held up. TIGTA’s September 21 report also found the unit handling the cases lost nearly 300 assistors.
What the 20-month figure doesn’t include: the notice decoder and the Form 3911 refund-trace steps in The IRS Refund Recovery Kit are built for the individual case sitting inside TIGTA’s average, not the average itself. Decode the notice behind a stalled identity-theft refund →
What TIGTA’s Watchdog Report Actually Measured
TIGTA’s report, numbered 2026-100-050 and dated September 21, 2026, set out “to evaluate the Internal Revenue Service’s efforts to reduce the inventory backlog of identity theft cases,” according to the report. Auditors reviewed 114 closed fiscal 2023 cases and analyzed IRS performance data running from December 2023 through April 2026. The audit was issued under Deputy Inspector General for Audit Diana M. Tengesdal and Acting Assistant Inspector General for Audit Kasey J. Koontz. Averaged across fiscal 2023 through 2025, TIGTA found the IRS took 20 months to close an identity theft case, against the agency’s own stated goal of resolving those cases within 120 calendar days. The gap was worse in the most recent year alone: the report puts the fiscal 2025 average at 582 calendar days, or roughly 19 months, for a single case, and its sample of fiscal 2023 cases averaged even longer, 655 calendar days.
Where The Time Actually Goes: Waiting For An Assistor
TIGTA’s sample points to a specific bottleneck rather than the casework itself: of that 655-day fiscal 2023 average, cases sat for 533 days simply waiting in unassigned inventory for an assistor to pick them up, the report found. Once a case was actually assigned, 54% of self-initiated cases and 44% of IRS-identified cases closed within 30 days, meaning the casework itself typically moves fast once someone starts it. The IDTVA function processes its inventory first-in-first-out without screening for how complex a given case is, and the report states IDTVA’s own management acknowledged they do not know a case’s complexity before it is assigned, so a simple case and a complicated one wait in the identical line.
The $124 Million The IRS Paid While Cases Sat
Behind the $124 million total is a refund-interest bill that grew every year TIGTA measured. The IRS paid $17.1 million in refund interest tied to delayed identity-theft cases in fiscal 2023, $45.6 million in fiscal 2024 and $61.6 million in fiscal 2025, adding up to roughly $124.2 million over the three years, according to the report. That interest accrues under Internal Revenue Code Sections 6621 and 6622, which set the overpayment rate at the federal short-term rate plus 3 percentage points, compounded daily; the IRS currently publishes that non-corporate overpayment rate at 7%, according to its quarterly interest rates page. The $124.2 million total is effectively the cost of the delay itself, compounding at that statutory rate for as long as a case sits in IDTVA’s inventory, not new revenue or an added feature of the identity-theft resolution process.
316,000 Cases Still Open, And Tens Of Thousands Never Told
A taxpayer enters this system by filing Form 14039, the Identity Theft Affidavit, reporting that someone else used their name and Social Security number on a return; TIGTA’s report separates these into self-initiated cases and cases the IRS identifies on its own. As of the end of fiscal 2025, nearly 316,000 identity theft cases remained unresolved in IDTVA’s inventory, according to the report. Beyond the wait itself, the report found more than 50,000 taxpayers in its fiscal 2023 review never received a status update or acknowledgment letter at all, and by fiscal 2025, 33% of taxpayers who filed a Form 14039 got no confirmation their affidavit had even been received.
Why The Wait Nearly Quadrupled The Agency’s Own Goal
TIGTA ties part of the slowdown to staffing. The Identity Theft Victim Assistance function “recently lost nearly 300 assistors” amid broader federal workforce reductions, the report states, with total assistors falling from 1,548 in 2024 to 1,173 in 2025 even as training for the remaining staff increased. That reduction landed in the same period the average case time climbed toward 582 days in fiscal 2025, a sequence TIGTA lays out without asserting the staffing cut is the sole cause of the delay. A unit operating with roughly a quarter fewer assistors than the year before, still triaging its inventory first-in-first-out rather than by complexity, is starting from a smaller base no matter what else changed in the same period.
What TIGTA Recommended, And Where The IRS Pushed Back
TIGTA made three recommendations in the report: developing procedures to evaluate a case’s complexity and expedite it into active inventory, sending acknowledgment letters for identity-theft claims that lack personally identifiable information, and creating a process to verify that acknowledgment and closing letters actually reach taxpayers. The IRS agreed with the first two recommendations, according to the report, but disagreed with the third, telling TIGTA its existing processes for confirming letters reach taxpayers are already sufficient. TIGTA’s own review found the opposite in practice: roughly 40% of the fiscal 2023 cases it sampled lacked the correspondence the IRS was supposed to send. That disagreement leaves the one recommendation aimed most directly at whether an identity-theft victim learns their case’s status, rather than simply waiting for it to close, as the one the IRS declined to adopt.
What TIGTA’s Averages Don’t Resolve For One Filer
TIGTA’s report puts the average identity-theft case at 20 months against the IRS’s own 120-day goal, and it traces years of refund interest the agency paid out rather than resolving the underlying cases faster. Neither figure tells an individual filer, mid-wait, what a specific IRS notice about their own stalled refund actually means or what step comes next.
The IRS Refund Recovery Kit combines a notice decoder with the Form 3911 refund-trace steps to help a filer read what a specific IRS letter is asking for and follow up correctly.
Read the notice decoder for a stalled identity-theft refund in The IRS Refund Recovery Kit.
This article was produced with AI assistance and checked against the primary sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
