$3.8 Million In IRS Refund Checks Stolen In Growing Fraud Scandal

A large-scale fraud operation has resulted in the theft of millions of dollars in IRS refund checks, leaving hundreds of taxpayers without their anticipated refunds. Rep. Nicole Malliotakis (R-NY) has received over 200 complaints from constituents claiming their IRS checks were stolen, with the total amount stolen reaching $3.8 million.

According to the Wall Street Journal, taxpayers expecting refunds ranging from a few hundred dollars to half a million have been left empty-handed. One of the victims, Atlanta-based spine surgeon Bennett Grimm, was expecting a $96,000 refund after selling his medical practice. However, after multiple reissued checks, his refund remains undelivered as the checks continue to be stolen and fraudulently deposited.

Rep. Malliotakis expressed frustration, saying, “People are getting these checks reissued, and the reissued checks are stolen,” indicating that the fraud scheme is widespread.

The IRS has been advising taxpayers to opt for direct deposit, which is considered safer and faster than paper checks. However, around 10 million taxpayers still choose paper checks each year, putting them at greater risk of fraud. IRS Commissioner Danny Werfel strongly encouraged taxpayers to use direct deposit as a precaution against theft.

When checks are stolen, taxpayers must file a formal statement with the IRS, after which the Treasury Department’s Bureau of Fiscal Service will issue a new check. The process can take up to four months, leaving victims in a frustrating limbo.

Check fraud has been on the rise nationwide. Two individuals in New York were sentenced to prison for stealing a $2.9 million refund check intended for a Texas couple, and a Los Angeles man was sentenced for orchestrating a $2.7 million stolen check scheme using Instagram.
With these incidents increasing, taxpayers and lawmakers alike are calling for stronger security measures to prevent refund fraud and ensure that Americans receive the money they are owed.