I’ve written before on the subject of tax-related identity theft and how common it is that it happens during tax time. I’ve also told you that you need to contact the IRS if you find out that an identity thief filed a return in your name. I’ve never followed up on what happens after you do this, though. A recent presentation by J. Russell George, Treasury Inspector General for Tax Administration (TIGTA) shone some light on the subject.
George told Congress that there are several problems with the way the IRS handles identity theft. These include:
Resolutions take too long, sometimes more than a year.
 New returns for those who have had theirs compromised are not processed quickly. 
Guidelines for what to do are conflicting, confusing, and incomplete. 
Data is not used properly for noting trends to prevent future crimes.
This doesn’t mean that the IRS isn’t doing anything to help prevent identity theft. Its deputy commissioner, Steve Miller, attested that the agency stopped over 325,000 fraudulent returns from going through, saving taxpayers from $1.75 billion in fake refunds, by using filters in its software. It’s also public knowledge that the agency is working on more ways to prevent thieves from using the tax information for deceased persons.
However, according to TIGTA, the number of victims of tax-related identity theft more than doubled between 2010 and 2011. The 2011 number is more than 650,000 individuals. While tax time is over for the year, unless you have filed an extension and are taking your time, or you are fighting with the IRS because you are a victim of identity theft – it is not too early to think about protecting your identity from fraud for next year. Why not sign up for an identity theft protection plan? It’s better than counting on the IRS notifying you of a crime or racing to try to file your return before the identity thief does. Even that may not protect you. It’s better not to find out the hard way.