Tax identity theft occurs when criminals use a person's information to file a fraudulent tax return and claim a refund. It remains a major problem, according to experts. Victims of tax identity theft wait an average of almost 19 months for the IRS to process legitimate returns and issue refunds. Signs of potential tax identity theft include IRS letters about suspicious returns, inability to e-file, and unexpected tax transcripts. Filing early is recommended to beat scammers, but complete and accurate returns should take priority over rushing.