What to Do if Your Tax Refund Is Missing or Stolen

Haven’t yet received your expected tax refund? It may be tangled in red tape — or already pocketed by a scammer, part of some $2 billion annually issued to crooks who file fraudulent returns to collect refunds under the identities of legitimate taxpayers.

The IRS generally issues direct deposit refunds within 21 days after receiving your tax return. Paper checks can take up to six weeks. If your refund is still MIA after that, here’s what to do:

 

  1. You can always check its status at “Where’s My Refund?” on the IRS website or with the IRS2Go mobile app. No news can be good news, suggesting your refund may be among the 10 percent processed later than typical. Bad news: If you’ve been notified that the IRS has already issued a refund that you haven’t received, assume you’re a victim of stolen identity refund fraud (SIRF).
  2. Call the IRS Refund Hotline at 800-829-1954 or the IRS TeleTax System at 800-829-4477 and request a refund trace. This is the process the IRS uses to track a stolen, lost or misplaced refund check or to verify that a financial institution received a direct deposit.
  3. If you are notified in that call or received a letter from the IRS saying that more than one return has been filed in your name (or if you believe your identity has otherwise been used fraudulently), call the IRS Identity Protection Specialized Unit at 800-908-4490. For that call, have copies of tax returns from the past few years, as well as (obviously) the duplicated return.
  4. You’ll need to complete IRS Form 14039, an identity theft affidavit, so the IRS can place an alert on your account. If you filed a state return, also contact your state tax agency.
  5. Gather proof that you are you: copies of your birth certificate, driver’s license, passport, marriage certificate, Social Security card and two recent utility bills; if your return was filed jointly, include a copy of your marriage license with your spouse’s “proof” paperwork. You’ll need to mail copies of these documents to the IRS. It’s also recommended that you file a report of identity theft with local police.
  6. Once your fraud is reported and affidavit filed, the IRS should issue you a personal identification number. Along with your Social Security number, this PIN must be used when filing future tax forms so the IRS knows to carefully review your account. If you filed a return as a resident of Florida, Georgia or the District of Columbia (which have the highest rates of refund fraud), you can get a PIN without being a victim of SIRF or other types of identity theft.
  7. If you haven’t already, place a fraud alert or stronger security freeze on your credit report, assuming the refund fraudster already has your SSN and other information to get credit cards, utility service and loans in your name. It’s also a good time to review a free copy of your credit report from each of the three agencies checking for unauthorized activity.
  8. Get smart with smartphones. Because fraud alerts are often linked to a phone number, refund fraudsters and other ID thieves angle to access victims’ cellphone accounts to redirect those alerts. Protect your smartphone, ignore spam that could harbor malware, be stingy downloading apps (especially for games) and disable those you don’t use. Make sure you also have an email address attached to fraud alerts and other ID theft-worthy news.
  9. Be patient. You will get your entitled refund — eventually — but it usually takes the IRS four to six months to resolve a case of fraud-related ID theft and issue the money. (For cases that aren’t resolved by then, call the Taxpayer Advocate Service at 877-777-4778.) The silver lining: When finally issued, your better-late-than-never refund should include paid interest.

 

For information about other scams, sign up for the Fraud Watch Network. You’ll receive free email alerts with tips and resources to help you spot and avoid identity theft and fraud. Keep tabs on scams and law enforcement alerts in your area at our Scam-Tracking Map.

Photo: iStock/Juanmonino

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