20 Months of Tax Refund Headaches vs. 10 Minutes of Prevention

Tyler Weerden

Oct 10

5 min read

Updated: Oct 11

You finally gathered all your documents and submitted your tax return, mentally spending your refund before it even arrives. But then you receive a notice saying the IRS rejected your return because someone else already filed using your Social Security Number. Who filed it? A criminal who stole your personal information, entered bogus numbers, and collected a nice, fat tax refund.

This is an all-too-common occurrence, and it’s becoming increasingly prevalent.

In April 2025, the FBI released an alert titled Criminal Actors Steal US Taxpayer Identity to File False Tax Returns and Claim Refunds. Reports of identity theft and fraudulent tax return incidents submitted to the Internet Crime Complaint Center (IC3) increased 26% from the previous year.

But wait...it gets worse.

On September 21, 2026, the Treasury Inspector General for Tax Administration (TIGTA) released a report titled The Process to Resolve Identity Theft Cases Is Long, Costly, and Frustrating for Taxpayers. What you need to know from the report:

During fiscal years 2023-2025, taxpayers waited 20 months on average for the IRS to process their identity theft case.
The average time the victim’s case spent sitting in the “unassigned inventory” bucket: 533 days. This means it wasn’t even assigned to an IRS employee to investigate for almost a year and a half.
The IRS’s goal is to close identity theft cases within 120 days of receipt. Out of the 114 cases TIGTA randomly sampled, only four were closed within the 120-day window.
Communication from the IRS may be extremely delayed or nonexistent, reducing your ability to protect yourself from further fraud. For 2023, the IRS Identity Theft Victim Assistance (IDTVA) function closed 89,599 “IDT 1” (self-reported by the victim) and 35,103 “IDT 3” (IRS identified potential ID theft) cases. TIGTA estimates that more than 50,000 taxpayers in the IDT 1/IDT3 group did not receive correspondence from IDTVA. Of those who did hear from the IRS, “52 percent of the acknowledgment letters were not sent for 100 calendar days or more after IDTVA received the case.”
The silver lining for taxpayers (I guess)? TIGTA reported that the IRS paid $124.2 million in interest on delayed refunds, as required by law.

The two charts below should drive home the fact that these problems aren’t going away anytime soon. Tax-return related fraud and delayed IRS processing will continue to create headaches for taxpayers.

Source: TIGTA: The Process to Resolve Identity Theft Cases Is Long, Costly, and Frustrating for Taxpayers

Overall reported cybercrime complaints (not just tax-related).

Source: FBI 2025 Internet Crime Report

What Can You Do?

Step 1: Get a six-digit IRS Identity Protection PIN (IP PIN) today.

Obtaining an IP PIN is free!
It’ll take you less than 10 minutes.
You do not have to be an identity theft victim to get an IP PIN.
Parents and legal guardians can also request an IP PIN for their dependents.
The IP PIN may prevent someone else from successfully filing a fraudulent tax return using your SSN or individual taxpayer identification number (ITIN).
If you file your own return using tax software, the software will ask you for this PIN. If you use a tax professional to file, make sure you give them the IP PIN.
You will need to get a new IP PIN every year. Each IP PIN covers one calendar year. You’ll use that annual IP PIN for all federal returns filed in that calendar year, including prior-year returns.
The easiest way to do this is with an IRS.gov account. You can log in and see your IP PIN each year under the Profile tab.
An incorrect or missing IP PIN will result in the rejection of your e-filed return or a delay of your paper return until it can be verified.

Click here to get your IP PIN.

Step 2: Run your own IRS Tax Compliance Report (TCR)

While your TCR won't directly prevent identity theft or tax fraud, reviewing it periodically may help you identify suspicious activity before it becomes a bigger problem.
Obtaining your TCR is free!
It’ll take you less than 10 minutes.
The report can also be used for employment, loan, and benefit purposes.
No surprises. You can download your TCR which will cover the last four years. The report details filing history, outstanding tax debts, and whether you’ve filed and paid your income, employment, and excise taxes on time (if applicable). Don’t wait until you receive an IRS notice.

Click here to get your Tax Compliance Report.

About the Author

Tyler Weerden is a fee-only financial planner, Enrolled Agent, and the owner of Layered Financial, a Registered Investment Advisory firm based in Arlington, Virginia. In addition to being a financial planner, Tyler is a full-time federal agent. He holds a Bachelor of Science degree, a Master of Science degree, passed the Series 65 exam, and is a Certified Fraud Examiner (CFE). Tyler is the sole Investment Adviser Representative at Layered Financial.

Prior to becoming a federal agent, Tyler served as a state trooper, local police officer, and was a member of the U.S. Army National Guard. He has served in both domestic and overseas Foreign Service assignments. Tyler has experience with local, state, and federal pension systems, 457(b) Deferred Compensation, the federal Thrift Savings Plan (TSP), Individual Retirement Accounts (IRAs), Health Savings Accounts (HSAs), and various investment options to include rental real estate.

Disclaimer

Layered Financial is a Registered Investment Adviser registered with the Commonwealth of Virginia, the State of Texas, and the State of Connecticut. Registration does not imply a certain level of skill or training. The views and opinions expressed are as of the date of publication and are subject to change. The content of this publication is for informational or educational purposes only. This content is not intended as individualized investment advice, or as tax, accounting, or legal advice. Nothing in this article should be seen as a recommendation or advertisement. Layered Financial and its Investment Advisor Representatives have no third-party affiliations and do not receive any commissions, fees, direct compensation, indirect compensation, or any benefit from any outside individuals or companies. Although we gather information from sources that we deem to be reliable, we cannot guarantee the accuracy, timeliness, or completeness of any information prepared by any unaffiliated third-party. When specific investments, types of investments, products, or companies are mentioned, such mention is not intended to be a recommendation or endorsement to buy or sell the specific investment, solicit the business, or use that product. The author of this publication may hold positions in investments or types of investments mentioned in articles. This information should not be relied upon as the sole factor in an investment-making decision. Readers are encouraged to consult with professional financial, accounting, tax, or legal advisers to address their specific needs and circumstances.