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IRS Mixed Up Deceased & Alive Taxpayer Accounts – DSJ Breakdown

In order to prevent identity theft and other forms of fraud, the Internal Revenue Service routinely locks the accounts of deceased taxpayers. Recently, the agency has also developed an indicator that automatically locks the accounts of millions of taxpayers that are presumed to be deceased. On its last sweep, however, this indicator could have been wrong about the life status of tens and thousands of taxpayers.


A report that was released last week by the Treasury Inspector General of Tax Administration(TIGTA), examined the overall procedures of the IRS when it comes to ensuring the accuracy of accounts that are locked by the indicator. This examination came after concerns were raised that the agency was improperly locking some of these accounts, which ultimately prevented taxpayers from filing their returns or collecting refunds.

TIGTA Report

According to the TIGTA Report, as of January 20th, 2023, the IRS had roughly 53 million taxpayer accounts locked due to the deceased indicator. However, a further analysis by TIGTA discovered that roughly 78,000 of these deceased taxpayer accounts were locked erroneously. “In these instances, the Social Security Administration’s data did not indicate that the taxpayer was deceased, i.e., there was no date of death present,” said the report. “Further analysis determined that the deceased account locks were input because of the filing of a return or other actions taken by the IRS. The IRS confirmed that 20,222 taxpayer accounts were locked in error due to both human and computer programming issues when identifying the appropriate taxpayer accounts to be locked.”

Recommendations to IRS 

TIGTA made seven recommendations to the IRS, and the agency agreed with six of them. One of these recommendations was to remove any of the accounts that were locked by mistake, which the IRS agreed with. Another recommendation provided to the IRS was that they identify the reason for the mistakes that led to this situation, and update its CP01H notice to say that taxpayers can work with the IRS to resolve the erroneous deceased account locks. The IRS disagreed with updating notice CP01H, saying that the notice already provides taxpayers with the necessary instructions to contact the agency for assistance.

Wrap Up

The IRS defended its strategy of using an indicator to identify deceased taxpayer accounts, saying that it is necessary in order to prevent identity theft and fraud. As time goes on, we will see if the IRS will put any preventative measures in place to stop this from happening again.

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