Half a million Americans face nearly two-year delays for stolen tax refunds, straining household finances amid rising identity theft cases.
The IRS is taking an average of 20 months to resolve tax identity theft cases for over 500,000 Americans, according to a federal watchdog report. The backlog has worsened despite increasing fraud complaints nationwide, leaving victims without critical refunds for nearly two years.
Tax-related identity theft surged 26% in 2025, with criminals filing fraudulent returns using stolen Social Security numbers. The IRS’s delays have forced many low- and middle-income taxpayers to delay essential expenses like rent and utilities, the report noted.
The National Taxpayer Advocate called the delays “unconscionable” and warned the problem is escalating. Stolen refunds are typically diverted to criminal-controlled accounts, compounding financial hardship for victims.