Taxpayer refund checks are becoming a popular target for check fraud, with 218 cases of stolen checks totaling $3.8 million reported by U.S. House of Representatives Nicole Malliotakis. The Treasury Department issues taxpayers a new check through the mail, but the replacement check in many cases are also getting stolen.
Rep. Malliotakis said her office has fielded 218 cases of stolen checks totaling $3.8 million, with amounts ranging from a few hundred dollars up to $500,000. In one case, it took a constituent four tries to get a refund check delivered. Members of Congress are calling on the Internal Revenue Service and Treasury to do more to prevent this issue.
While more than 90% of taxpayers choose to get refunds by direct deposit into their bank account, nearly 10 million paper refund checks went out last year. Some taxpayers prefer paper checks to sharing their bank information with the IRS. A technology fix is under way that would allow people to switch their preference on the IRS site, but the update is a few years away.
The IRS has a system in place for lost or stolen checks, and individuals can request a refund trace by filling out an IRS taxpayer statement form and mail or faxing it to the IRS office where they filed their tax return.
We strongly recommend that members have their tax refund direct deposited to a Credit Union account.