In yet another blow to an already faltering agency, a new Treasury report finds that the IRS is slow – very slow – to investigate and resolve cases of identity theft and stolen tax refunds. Victims often face errors and months-long waits for their refunds.

According to the Treasury’s inspector general for tax administration, the IRS took an average of 278 days (or nine months) to resolve tax fraud cases in fiscal year 2013. Although that’s ridiculously long, it’s still an improvement from 312 days (or more than 10 months) a year earlier. This is a big contradiction to the 180 days the IRS tells customers it takes them to resolve their cases. The IRS was even getting bolder and claiming that cases could be closed within 120 days thanks to new measures they were putting in place.

The inspector general reviewed 100 cases of identity theft that were closed in 2013 as part of the audit. In addition, to the nine month resolution time, the auditors continued to find errors on the part of the IRS. They estimate that a tenth of the 267,000 total cases resolved by the IRS that year may have been resolved inaccurately leading to longer wait times and incorrect refunds. We wonder how long it took to finally get it right.

Auditors made recommendations to the IRS such as developing processes and procedures to ensure case closing actions and account adjustments are accurate, accurately calculate the average time it takes to fully resolve cases, and accurately report the number of identity theft cases resolved. IRS staff could also use comprehensive training to prepare them to handle cases and analyze their case reassignment processes to ensure cases don’t keep getting shuffled around.

You’d think the IRS would embrace these recommendations. Think again. The IRS agreed or partially agreed with four of the five recommendations. But they're adamant that they don't need new procedures to calculate the average case resolution time. They think they have it down.

The Hill reports:

"Refund fraud adversely affects the ability of innocent taxpayers to file their tax returns and timely receive their tax refunds, often imposing significant financial hardship," Russell George, the tax administration inspector general, said in a statement. 

Identity theft has become a bigger and bigger problem for both the IRS and taxpayers in recent years, with the tax agency paying out an estimated $5.8 billion in fraudulent returns in 2013. IRS officials have often cited the rise in identity theft as they lobby lawmakers for more funding.

But the agency also took issue with the inspector general’s findings that taxpayers are facing continued delays as they seek closure on identity theft cases, suggesting that the new report overstates the wait time that taxpayers are facing.

The IRS said in a statement that the report fails to account for improvements the agency put into place starting in January 2013, and the inspector general only examined cases in which the victim was expecting a return. In all, the inspector general examined 100 cases from October 2012 to September 2013.

The inspector general, the agency said, “pulled cases for this audit prior to new changes and improvements being put in place – even though they knew the changes were anticipated at the start of the new year. In fact, nearly half of the cases sampled were closed before January 2013.”

“Until this is corrected, the IRS will continue to provide an inaccurate account resolution timeframe to taxpayers due a refund,” the inspector general said in its report.

We’ve been reporting on the IRS quite a lot over the last few years—from the agency’s targeting of tea party groups to its failure to deal promptly and professionally with identity theft. The IRS has launched a gripe campaign predictably claiming that it needs more money.

This all comes at a time when the IRS’s workload just became larger thanks to its administration of ObamaCare. The IRS is under a lot of pressure and rightly so. This is an agency that waged a nasty campaign to discriminate against conservative and tea party organizations on partisan grounds.

American families tightened their belts when the economy floundered and learned to get along with less. It’s time for this agency to learn how to do its job well within the vast federal budget allotted to it.  Instead of quibbling with auditor recommendations and trying to save face, the IRS ought to embrace them and figure out how they can get these things done in an efficient manner.

Here’s a small suggestion: The agency might have spent the resources devoted to harassing tea party groups more profitably on legitimate endeavors.