If you’re the victim of tax-related identity theft, prepare to wait almost two years to get your cash back from the IRS — here’s why

“For many low- and middle-income taxpayers, waiting nearly two years for a refund is not merely an inconvenience — it can mean falling behind on rent, utilities, transportation costs, and other basic living expenses,” National Taxpayer Advocate Erin Collins wrote in the report.

What is tax-related identity theft?

Tax-related identity theft occurs when a criminal uses a stolen Social Security number to file a fraudulent tax return and claim a refund before the real taxpayer has a chance to file their own return.

In 2025, the FBI’s Internet Crime Complaint Center reported receiving more than 1,000 complaints about this type of crime in one year alone — a 26% jump from the prior year. Stolen refunds are typically redirected to bank accounts, prepaid debit cards or mail drops controlled by the criminals.

For the legitimate taxpayer, the impact is immediate and cascading. Their return gets flagged, their refund gets withheld and they’re pulled into an administrative maze that Collins describes as “frustrating, burdensome, difficult to navigate and time-consuming.”

Meanwhile, the money they were counting on disappears into the IRS’s backlog.

Why the wait is so long — and getting longer

The timing of this report matters. The IRS has undergone dramatic staffing reductions in the past year, driven in part by cuts from the Department of Government Efficiency.

According to the National Taxpayer Advocate’s report, the agency employed 74,000 people at the start of the 2026 tax filing season — a 27% reduction from the 102,000 employees it had just a year earlier.

Identity theft cases fall into what the report describes as a growing divide in tax administration — between cases that can be resolved through automated systems and those that “need individualized assistance, manual review or flexibility.” Identity theft victim cases land in the latter category, which is why staffing cuts hit them hardest.