Bipartisan legislation recently introduced in the U.S. Senate would help taxpayers who have had paper checks from the U.S. Department of Treasury lost in the mail or stolen to receive payment by electronic deposit
The Recovery of Stolen Checks Act would require the Department of the Treasury to create a secure, streamlined process to allow eligible taxpayers to receive their replacement refunds electronically via direct deposit.
Under current law, if an Internal Revenue Service (IRS) refund check is stolen, only a replacement paper check be can issued.
Hundreds of millions of dollars in theft have resulted from stolen mail. Monthly, 4,000 to 5,000 stolen IRS refund checks are available for sale on the dark web, according one investigation. In May, two postal workers were charged in connection to a $63 million scheme to steal IRS refund checks.
U.S. Sens. Marsha Blackburn (R-TN) and Mark Warner (D-VA) introduced the bill. The bill passed the U.S. House of Representatives where it was introduced by U.S. Reps. David Kustoff (R-TN), Nicole Malliotakis (R-NY), and Terri Sewell (D-AL).
“With check fraud costing taxpayers hundreds of millions of dollars, it makes no sense for the federal government to keep reissuing vulnerable paper checks after they have already been stolen or gone missing,” Warner said.