How to Prevent Your Tax Refund From Being Stolen

If you're counting on money back from the IRS, you can't afford to let it fall into the wrong hands.

Maurie Backman
Maurie Backman
Feb 20, 2019 at 7:06AM
Investment Planning

Though many tax experts will argue that getting an IRS refund is actually a bad thing, as it means having lent the government a portion of your earnings for nothing in return, many tax filers look forward to the idea of getting a lump sum of cash in their bank accounts. But if you're counting on a tax refund, the last thing you want is for that money to somehow get stolen. Here's how to protect yourself from criminals who would love nothing more than to get their hands on the cash that's rightfully yours.

1. File your taxes early

Filing your taxes well ahead of this year's April 15 deadline could help you avoid falling victim to fraud. The reason? If a criminal steals your identity, he or she might file a return on your behalf and collect the refund that goes along with it. Then, when you go to file your return, the IRS will likely flag it as a duplicate and reject it. At that point, it'll be on you to prove that you're the rightful filer and that the refund you're due has fallen into somebody else's hands. But if you get your return in first, and a criminal files one in your name after the fact, his or hers will get rejected, and your refund will be safe in your bank account, where it belongs.

Closeup of man at laptop holding his head and looking worried.

IMAGE SOURCE: GETTY IMAGES.

2. Know when to expect your refund

The IRS typically issues refunds for electronically filed returns within 21 days. If you sign up for direct deposit, you might get your money even sooner. Therefore, if you file your return but don't see your cash back in the appropriate time frame, be sure to follow up with the IRS to ensure that it didn't land in a criminal's hands.

Keep in mind, however, that there are certain factors that can delay your refund. If you file a paper return, for example, it'll usually take twice as long to get your money as it would if you were to file electronically. Similarly, if your tax return contains an error, your refund might get delayed as well. Still, it helps to know when to expect your refund and be vigilant about tracing it.

The IRS has a "Where's My Refund?" tool that allows you to track your refund status once your return is received. (If you file on paper, your refund information might not be available right away.) If that tool shows at any point that your refund was paid, but you don't see the funds in your account, be sure to contact the agency right away.


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3. Know how the IRS communicates with tax filers

If the IRS needs to reach you, it will do so by good old-fashioned mail. The IRS doesn't communicate with filers via phone, email, or text, so if you receive a message from the agency that doesn't arrive via the postal service, don't respond to it. Instead, forward it to the IRS's fraud department. Engaging with a criminal increases your likelihood of getting scammed out of your tax refund, so don't fall into that trap.

If you do have reason to believe your tax refund has been stolen, contact the IRS at once at 1-800-829-1954. You should also contact your various banks and credit card companies to let them know that your identity has been stolen. Finally, put a fraud alert on your credit reports by contacting the three major credit bureaus: Experian, Equifax, and TransUnion. The more vigilant you are, the more you can minimize the damage if you become an unwilling victim of fraud.