Where’s My Refund? Has Your Tax Return Been Flagged for Possible Identity Theft? (2024)

One persistent challenge the IRS continually deals with is preventing fraudulent refunds from being issued. Sadly, this phenomenon has become more and more common, as the number of refundable credits and their values continue to increase, such as the Earned Income Tax Credit (EITC), the Additional Child Tax Credit (ACTC), and the Recovery Rebate Credit (RRC). One way the IRS has addressed this issue is to screen tax returns to determine if income and wages are correct and if the legitimate taxpayer truly filed the tax return. This blog addresses issues where the IRS, through its screening process, flags the tax return as potential identity theft (IDT); processing of the tax return is suspended; and a letter is sent to the filer asking them to authenticate their identity and certain tax return items before processing can resume.

This blog will not discuss how taxpayers who are victims of IDT can work with the IRS to get their tax issues resolved. For more information, visit the Taxpayer Advocate Service (TAS) Identity Theft Get Help page.

Taxpayers whose tax returns have been flagged for possible IDT should receive one of the following letters:

These letters provide several ways taxpayers can authenticate their identity, including using an online option or calling the IRS directly. In limited situations, taxpayers will be asked to make an appointment at a Taxpayer Assistance Center and authenticate their identity in person.

In 2022, Millions of Taxpayers Never Responded to Their Authentication Letters

In 2022, the IRS suspended processing of 4.8 million tax returns and requested taxpayers authenticate their identity prior to the IRS releasing their refunds. Out of those, about two million taxpayers responded, verified their identities, and received their refunds; nearly 255,000 were confirmed as IDT; and over 2.5 million remain suspended as of December 31, 2022, because the taxpayers’ identities have still not been authenticated.

If you are still waiting for your tax refund and think your tax return may be one of the 2.5 million that remain suspended from filing season 2022 because the IRS suspects possible IDT, or you still have not received your refund from the tax return you filed in 2023, you might need to verify your identity before your refund is released.

Taxpayers should check to see if they ever received one of the letters above for tax year 2021 or 2022. If the letter cannot be located, taxpayers should check their IRS online account or call the Taxpayer Protection Program (TPP) phone line at 800-830-5084. (If a taxpayer lives outside the U.S., they should call 267-941-1000.) As of January 29, 2023, for those taxpayers who receive a letter asking them to authenticate their identity and return information online, they can go into their online account, which will tell them they need to verify information on their tax return before it can be processed. This will direct the taxpayer to the Identity and Tax Return Verification Service website. If the explanation for the suspended tax return is that the IRS is awaiting authentication of the taxpayer’s identity, an Accounts Management customer service representative will reissue the letter explaining what steps need to be taken and direct taxpayers to the Identity and Tax Return Verification Service.

On one hand, having the IRS protect against IDT is good for all, but for those taxpayers dealing with IDT or needing the IRS to release their refunds when flagged as potential identity theft, the delay causes issues, and the process is confusing and time consuming. The IRS should assist taxpayers throughout the process to reduce the burden for those properly filed tax returns.

Why Don’t Taxpayers Authenticate Their Identity?

There are a couple of explanations as to why a taxpayer may not respond to the letter and authenticate their identity, the most obvious being the tax return truly was filed by an identity thief, and the thief has abandoned their attempt to obtain a fraudulent refund. However, there are other possible explanations as to why the taxpayer’s identity has not been authenticated. The taxpayer may have never received the letter, may have moved, didn’t understand the letter, or couldn’t get through on the IRS’s phone line to authenticate their identity, as the level of service on the TPP phone line was only about 31 percent for FY 2023 as of August 5, 2023. In fact, in a recent conversation with Low Income Taxpayer Clinic (LITC) personnel on the authentication process, it was conveyed that many taxpayers – particularly taxpayers who speak English as a second language – find both the letters and the authentication process complex and confusing.

The IRS’s online tools, such as Where’s My Refund, provide taxpayers with limited information about the status of their refunds; however, this tool only tells taxpayers their tax return has been received or processed, or a refund was issued. No information is provided to taxpayers when processing of a tax return has been suspended for potential IDT. Although the IRS has agreed to make enhancements to its Where’s My Refund? tool and provide taxpayers more information about the status of their tax return, this upgrade has not been done to date. The IRS has committed to devoting some of the Inflation Reduction Act of 2022 funds to roll out several enhancements by next filing season to enhance the usefulness of the tool to taxpayers.

In response to these concerns, the IRS Wage and Investment (W&I) Division made several modifications in an attempt to improve the clarity of the letters. To further explore the issues raised by the LITCs during these conversations, TAS is working with W&I to expand this inquiry to a focus group composed of taxpayers who have received these letters. Additionally, the IRS has recently begun a pilot program in which it will send out several versions of the same type of letter asking taxpayers to authenticate their identities to determine which version is most successful in yielding a response from taxpayers. (For more information about the pilot program and the different versions of the letters, visit Understanding Your Letter 5071C or 6331C | Internal Revenue Service (irs.gov)).


While the IRS and TAS continue to work together to improve these letters, if you received one it is important that you respond quickly and authenticate your identity and tax return data so the processing of your tax return can be completed, and your refund issued. The letter contains the information you need to have available when you respond to the IRS. If you receive a letter and need assistance in working with the IRS to authenticate your identity and are eligible, you can reach out to an LITC, many of which work very closely with the IRS in getting these cases resolved. If you are required to authenticate your identity and lost your letter or didn’t receive one and as a result are still waiting for your 2021 or 2022 tax refund, contact the IRS to have the letter reissued. If you have attempted to authenticate your identity with the IRS but have been unsuccessful, contact TAS for assistance.

Additional Resources

Eligible taxpayers can reach out to LITCs for assistance. LITCs areindependentfrom the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court, including the Tax Court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. LITC services are offered for free or a small fee. For more information or to find an LITC, visit www.taxpayeradvocate.irs.gov/litcorseeIRS Publication 4134, Low Income Taxpayer Clinic List. This publication is also available online atwww.irs.gov/forms-pubsor by calling the IRS toll-free at 800-TAX-FORM (800-829-3676).

Where’s My Refund? Has Your Tax Return Been Flagged for Possible Identity Theft? (2024)


Where’s My Refund? Has Your Tax Return Been Flagged for Possible Identity Theft? ›

Taxpayers whose tax returns have been flagged for possible identity theft should receive one of the following letters: Letter 5071C, Potential Identity Theft during Original Processing with Online Option – Provides online and phone options and is issued most widely.

Why did the IRS flag my return for identity theft? ›

When a thief steals someone's Social Security number, they can use it to file a fraudulent tax return. This is tax-related identity theft. The IRS scans tax returns for possible fraud. If a tax return is flagged as suspicious, the agency will pull it for more review.

How long does it take to get a refund after identity theft? ›

The IRS says that it resolves tax identity theft cases in 120 to 180 days, depending on your circ*mstances. But in many instances, victims of complex tax identity theft have experienced resolution times of more than one year.

What if the IRS rejected my return due to identity theft? ›

If your e-filed return is rejected because of a duplicate filing under your Social Security number, or if the IRS instructs you to do so, complete Form 14039, Identity Theft AffidavitPDF, attach it to the back of your completed paper tax return and mail to the IRS location based upon the state you reside.

How long does identity theft investigation take with the IRS? ›

A typical case can take about 180 days to resolve, and the IRS is working to reduce that time period. While the identity theft cases are being worked, the IRS also reminds victims that they need to continue to file their tax returns during this period.

How do I remove identity theft from the IRS? ›

Complete Form 14039, Identity Theft AffidavitPDF, attach it to the back of your completed paper tax return and mail to the IRS location based upon the state you reside. If you prefer, you have the option to submit the Form 14039 online and mail your paper return separately.

How do I fix identity theft with the IRS? ›

You may also contact the IRS for specialized assistance at 800-908-4490. These IRS employees are available to answer questions about identity theft and resolve any tax account issues that resulted from identity theft. Review Publication 5027, Identity Theft Information for Taxpayers, for more information.

How do I know if my tax return has been flagged? ›

Taxpayers whose tax returns have been flagged for possible IDT should receive one of the following letters: Letter 5071C, Potential Identity Theft during Original Processing with Online Option – Provides online and phone options and is issued most widely.

Why is my tax return being reviewed to protect me from identity theft? ›

They're trying to crack down ... to make sure you're [the one] actually filing,” said Dan Herron, a certified public accountant and certified financial planner based in San Luis Obispo, California. Sometimes, the system inadvertently catches returns that aren't fraudulent, though.

What is the fastest way to verify my identity with the IRS? ›

You can verify your identity using Self-Service or on a video call with an ID.me agent. Select the tab below for an overview of each verification method: Note: If you live outside of the United States and don't have a US phone number, mailing address, or Social Security number, you can still verify your identity.

How common is tax return identity theft? ›

The IRS' Identity Theft Victim Assistance program had 294,138 individual case receipts during fiscal 2023, up from 92,631 in 2019, according to the National Taxpayer Advocate's annual report to Congress released last week. Tax-related identity theft has diminished since the early days of electronic filing.

What happens if you get red flagged by IRS? ›

It may not mean that your return will be selected for audit, but an amended tax return red flag generally means someone at the IRS will make sure that the return was done properly.

What are the first signs of identity theft? ›

Warning signs of identity theft
  • Bills for items you did not buy.
  • Debt collection calls for accounts you did not open.
  • Information on your credit report for accounts you did not open.
  • Denials of loan applications.
  • Mail stops coming to, or is missing from, your mailbox.
Dec 6, 2023

Why does it take 9 weeks after identity verification to get refund? ›

Called to check today since it's past the 21 days, and the representative confirms that everything is verified but it will most likely be nine weeks before anything is issued because that's how long it take their system to get it through processing once there is any identity issue.

Will you know if the IRS is investigating you? ›

This type of investigation is more common than you would think, and you might not even be aware that you are under investigation until the IRS sends you a subpoena or shows up at your door front. An IRS criminal investigation is not the same as an IRS audit.

What triggers a 5071C letter? ›

If the IRS suspects that a tax return with your name on it is potentially the result of identity theft, the agency will send you a special letter, called a 5071C Letter. This letter is to notify you that the agency received a tax return with your name and Social Security number that it believes may not be yours.

What happens if you get flagged by the IRS? ›

It will impose tax penalties if errors are found in your tax returns. There's also the possibility of jail time in serious cases of tax evasion and tax fraud. The IRS may normally flag one return for audit but it does have the authority to audit returns from the past several years.

What raises red flags with the IRS? ›

Too many deductions taken are the most common self-employed audit red flags. The IRS will examine whether you are running a legitimate business and making a profit or just making a bit of money from your hobby. Be sure to keep receipts and document all expenses as it can make things a bit ore awkward if you don't.

What is the identity theft flag rule? ›

Are you up on the Red Flags Rule? (Sometimes it's referred to as one of the Fair Credit Reporting Act's Identity Theft Rules and it appears in the Code of Federal Regulations as “Detection, Prevention, and Mitigation of Identity Theft.”) The Red Flags Rule requires many businesses and organizations to implement a ...

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