A significant number of taxpayers who chose to receive their IRS tax refunds via mail have fallen victim to a widespread theft operation, according to a report by The Wall Street Journal. Over 200 individuals have reported that their refund checks, some valued at up to $500,000, were stolen. This large-scale fraud has resulted in millions of dollars in losses, sparking concerns over the security of mailed IRS refund checks.
Representative Nicole Malliotakis Responds to Stolen Checks
Nicole Malliotakis, a Republican representative from Staten Island, has taken on 218 cases involving stolen refund checks, amounting to $3.8 million in missing funds. One of her constituents faced the issue of having to refile multiple times to receive their refund, only to have reissued checks stolen as well. The congresswoman is pushing for stronger measures to address this growing problem, which has impacted many in her district.
Atlanta Surgeon Victimized by Theft
A prominent case involves Bennett Grimm, a spine surgeon from Atlanta. After selling his medical practice, Grimm expected a $96,000 refund from his amended 2021 tax return. Although the IRS confirmed that the check was on its way, months passed without its arrival. A replacement check was also stolen and fraudulently deposited, and Grimm is now awaiting a third reissued check in hopes that it won’t be stolen like the previous ones.
Direct Deposit: The Safer Option
The IRS estimates that over 90% of taxpayers choose to receive refunds via direct deposit, which is considered the safest and fastest option. However, around 10 million taxpayers still prefer mailed refunds, making them more vulnerable to theft. Taxpayers who select paper checks are unable to switch to direct deposit within the same tax year if their check is stolen or lost, which complicates the process of reclaiming their funds.
IRS Encourages Use of Direct Deposit
In response to the rising cases of stolen checks, IRS Commissioner Danny Werfel has urged taxpayers to opt for direct deposit when possible. This method significantly reduces the risk of theft and ensures quicker refunds. Taxpayers who fall victim to check theft must fill out a taxpayer statement form and submit it to the IRS office where their return was filed. Once verified by the Treasury Department’s Financial Services Office, a replacement check will be issued. While the process can take up to four months, in some cases, it may be completed in less than 30 days.
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For more information, visit the IRS official page.