The window for claiming certain self-employment tax credits tied to pandemic-era relief has been narrowing for months, and as of early 2026, the IRS has tightened its verification requirements for amended returns filed under the Self-Employed Tax Credit program. For workers like Lorraine Hensley, that shrinking window isn’t an abstraction — it’s the difference between a bill she can pay and one she can’t.
I found Lorraine through a call-for-sources I posted on social media in late February 2026, asking to hear from self-employed workers who had tried to navigate government benefits or federal relief programs. Her response came quickly, typed entirely in lowercase: “i’ve been fighting the irs for over a year and i still don’t know if i’m getting what i’m owed. i’ll talk.” We met the following week at her barbershop on Broad Street in Richmond, Virginia, a narrow room with two chairs, a wall of product bottles, and a handwritten sign by the register that read: “Cash is king. Venmo is fine. Checks are not.”
A Self-Employed Life With No Financial Safety Net
Lorraine Hensley, 59, has owned her barbershop for eleven years. She cuts hair six days a week, takes no vacations, and has no employees — just herself, her clippers, and a client list she built from scratch after leaving a corporate salon in 2014. In a good month, she told me, her shop brings in roughly $7,200. In a slow month — January, say, or a week when the heat goes out — it might be $3,400.
That gap is the defining financial fact of her life. Her partner, Damon, is completing a nursing program and not yet earning. Together, they cover rent, utilities, and his tuition on income that swings by nearly $4,000 a month with no predictability.
When the Self-Employed Tax Credit — designed to compensate independent contractors and sole proprietors for days they couldn’t work due to COVID-19 — became available for retroactive claims, Lorraine’s tax preparer calculated she may have qualified for up to $4,800 based on her 2020 and 2021 net earnings. She filed an amended return in March 2023. What followed was not a refund. It was a case number.
The Fraud That Wasn’t Hers
Sometime in early 2023, someone filed a federal tax return using Lorraine’s Social Security number. She doesn’t know who. She doesn’t know how they got her information. The fraudulent return claimed a refund of approximately $1,100 — small enough to potentially slip through, significant enough to trigger an IRS identity verification flag on her account.
When her legitimate amended return arrived weeks later, the IRS system saw a second filing from her SSN in the same tax year and froze the account pending identity review. A letter arrived in June 2023 directing her to verify her identity through ID.me, the third-party verification platform the IRS uses for online authentication.
She completed the ID.me verification in July 2023. The IRS confirmed receipt. Then: silence. Months of it.
According to the Taxpayer Advocate Service, identity theft cases at the IRS take an average of more than 19 months to fully resolve, a backlog that has persisted despite Congressional pressure. Lorraine’s case moved faster than average — but at 14 months, it didn’t feel fast.
What Irregular Income Did to Her Eligibility
The identity freeze was only one of Lorraine’s obstacles. The other was her income itself. The Self-Employed Tax Credit calculates eligible days based on net self-employment income averaged across the claim period. For workers with stable salaries, this math is straightforward. For a barber whose income varies by $3,800 a month, it produces a number that may not reflect lived reality.
Lorraine’s preparer had initially estimated the $4,800 figure using stronger-revenue months. When the IRS processed the return — finally, in May 2024 — it calculated her average daily net income at a lower figure than projected, applying it across fewer qualifying days. The result: a credit of $3,140, or roughly $1,660 less than she had counted on.
“I had already mentally spent that money,” she told me, setting down her coffee. “I know that’s my fault. But when someone tells you you’re owed $4,800, you make a plan. You tell your partner. You stop losing sleep for a few months. And then it’s less. And the ‘less’ is what’s real.”
Navigating the IRS as a Solo Business Owner
What struck me most in my conversation with Lorraine was not her frustration — though that was evident and earned — but the sheer volume of administrative labor she described absorbing alone. She made seven phone calls to the IRS between August 2023 and March 2024. She filed a Form 14039 Identity Theft Affidavit. She requested a transcript of the fraudulent return twice before receiving it. She never spoke to the same representative twice.
There is a resource most people don’t know exists for exactly this situation: the Taxpayer Advocate Service, an independent body within the IRS that helps taxpayers experiencing prolonged delays or hardship. Lorraine didn’t learn about it until month eleven, when a friend in an online self-employed workers’ forum mentioned it. She filed a request for assistance in February 2024. Within six weeks, her case moved.
The Outcome — and What It Actually Changed
The $3,140 arrived by direct deposit in late May 2024. Lorraine used $1,800 of it to pay down a high-interest credit card she had opened during the waiting period to cover a slow-revenue stretch in winter 2023. The rest went toward a replacement shampoo bowl that had been broken since October.
She did not use it to rebuild savings. She had no savings left to rebuild upon.
The credit score damage from the identity theft itself is a separate, still-unresolved chapter. Lorraine told me the fraudulent return was accompanied by a fraudulent bank account opened in her name — one that went into collections before she discovered it. Her credit score dropped from approximately 690 to 591 between January and August 2023. As of our conversation in March 2026, it had recovered to 634.
“I’m 59 years old,” she said, sweeping up hair clippings between appointments. “I own this place. I’ve been paying taxes since I was sixteen. And I spent fourteen months proving I exist to a government that took my taxes on time every single year. That math doesn’t work for me.”
What Lorraine’s Story Reflects About the Broader System
Lorraine’s case sits at the intersection of two documented, systemic problems: IRS identity theft backlogs and the structural disadvantage facing irregular-income workers in benefit calculations. Neither problem is new. Neither has been fully addressed.
Lorraine’s anger, which surfaced repeatedly in our conversation, doesn’t have a clean target. She knows the IRS isn’t one person. She knows the person who stole her identity isn’t the government. But the frustration of navigating multiple broken systems simultaneously — with no HR department, no paid time off for phone calls, no employer-sponsored financial counselor — accumulates into something that doesn’t resolve when the check finally arrives.
“Getting the money was not the end of it,” she told me as I packed up to leave. “The end of it is when I stop thinking about it. And I’m not there yet.”
I walked back out onto Broad Street with that line in my head. Fourteen months, $1,660 short of what she was told to expect, a credit score still climbing back from someone else’s crime. The check came. The cost of waiting for it didn’t go anywhere.
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