IRS Identity Verification Notice Slows 2025 Refunds
Millions of taxpayers are receiving an IRS identity verification notice during the 2025 tax filing season as the Internal Revenue Service strengthens safeguards against tax-related identity theft and income tax fraud. The verification process allows the agency to confirm that the correct taxpayer filed a federal income tax return before issuing refunds, a step officials say protects taxpayers from fraudulent claims linked to stolen Social Security numbers or taxpayer identification numbers.
The Internal Revenue Service expanded its verification system during the 2025 tax filing season, leading to more tax returns being flagged for identity verification review. The IRS compares information reported on a tax return with employer wage documents such as Form W-2 and Form 1099, prior Form 1040 filings, and other supporting forms submitted with the federal income tax return.
According to the Treasury Inspector General for Tax Administration, the IRS used nearly 300 automated fraud filters during the 2025 filing season. The filters review taxpayer records, public data sources, and filing patterns to detect tax fraud and tax-related identity theft.
When irregularities are detected, the return may be placed in an identity verification review before the IRS releases taxpayer refunds.
The IRS verification system reviews millions of federal income tax returns each year to identify patterns linked to ID theft or income tax fraud. When suspicious activity appears, the agency may temporarily pause processing while verifying your identity.
A return may be flagged when the name, Social Security Number, or individual taxpayer identification number on a filing does not match existing IRS or Social Security records. Differences between employer wage reports and the information on a federal income tax return may also trigger a review.
For example, income reported on Form W-2 or Form 1099 may differ from the amounts reported on the taxpayer’s Form 1040. When this occurs, the IRS may issue an Identity Verification Notice to confirm the filer's identity before continuing processing.
Returns that claim unusually large refunds or display sudden changes in adjusted gross income may also receive additional screening. Fraud filters may review filings that report business income on Schedule C or that show withholding amounts inconsistent with previous filings.
These patterns do not automatically indicate tax fraud, but they can prompt an Identity Verification Letter while the IRS confirms that the correct taxpayer filed the return.
Changes in filing patterns can also trigger identity verification. A return filed from a new location, submitted through unfamiliar tax software, or containing new direct deposit information may be flagged by the IRS verification system.
Returns submitted before the IRS receives matching wage information from employers may also undergo review until the agency confirms the accuracy of the reported income.
When the IRS Taxpayer Protection Program identifies a suspicious filing, the agency typically sends a verification letter to the taxpayer’s address on record. These letters instruct taxpayers to confirm their identity before their returns can be processed in the system.
One of the most common notices is the 5071C Letter, which belongs to the CP5071 series notice. This Identity Verification Letter directs taxpayers to use the IRS Identity Verification Service, also known as the Tax Return Verification Service or Return Verification Service.
During the verification process, taxpayers may answer verification questions and confirm information from their tax return. Some taxpayers may also complete ID verification through ID.me Wallet, which uses multi-factor authentication and a one-time password to confirm identity.
The IRS may request a government-issued document, such as a driver’s license or another U.S. federal or state-issued photo identification. Additional documents, such as a Social Security card, lease agreement, utility bill, or mortgage statement, may be used to confirm identity and address.
In some cases, taxpayers must verify their identity in person at a Taxpayer Assistance Center. Individuals attending an appointment may need to bring identification documents along with copies of their federal income tax return and supporting forms.
If the IRS determines that identity theft may have occurred, taxpayers may be asked to submit Form 14039, Identity Theft Affidavit, also known as Federal Form 14039. The form allows taxpayers to report suspected tax-related identity theft and begin resolving the issue.
When the IRS flags a return for identity verification, processing pauses until the taxpayer confirms their identity. This step often delays the refund while the agency completes the review.
Taxpayers who check their tax transcripts through the IRS website may notice certain transaction codes during the review process. Code 570 typically indicates that the IRS has placed the return on hold, while Code 971 usually signals that the agency has sent an IRS notice requesting additional information.
Once your identity is verified through the verification system, the IRS generally resumes processing the return and issuing refunds.
The Internal Revenue Service encourages taxpayers to enroll in the Identity Protection PIN program to reduce the risk of tax-related identity theft. Identity Protection PINs, often called IP PINs, are six-digit codes that must be included when filing a federal income tax return.
The IP PIN helps confirm the taxpayer’s identity and prevents criminals from filing a return using a stolen Social Security Number. Taxpayers can obtain an IP PIN through their IRS account on the IRS website before they file their taxes.
Federal agencies warn that scammers often exploit confusion surrounding IRS notices during tax season. Criminals may impersonate the Internal Revenue Service and attempt to obtain personal data by claiming a taxpayer must verify their identity immediately.
The Federal Trade Commission and the Cybersecurity and Infrastructure Security Agency have issued alerts about these schemes. Fraudsters often contact victims by phone, email, or text, posing as IRS officials.
The IRS states that legitimate identity verification requests are delivered by mail as an official IRS notice. Taxpayers who receive suspicious messages should avoid responding and instead use the official verification tools on the IRS website.
By William Mc Lee, Editor-in-Chief & Tax Expert—Get Tax Relief Now