Preventing Identity Theft
Last updated on August 26, 2024
Identity theft has been a major problem for the IRS for years. Identity theft topped the IRS’ list of the top 12 tax scams in the country for two years running. Given the difficulty in identifying and tracking the fraudster, along with the complexity of the scam, the IRS continues to struggle in keeping this type of activity in check.
In an effort to prevent identity theft, the IRS has placed a limit on tax refunds which you can have routed into one financial account, or pre-paid debit card, to three. Any subsequent tax refunds will be automatically converted to paper refund checks and mailed. The new limit will be implemented for the 2015 tax filing season. The rule also applies to tax preparers.
According to the IRS, “The vast majority of taxpayers will not be affected by this limitation, and we would encourage taxpayers and tax preparers to continue to use direct deposit. It is the fastest, safest way for taxpayers to receive refunds.
“The direct deposit limit will prevent criminals from easily obtaining multiple refunds. The limit applies to financial accounts, such as bank savings or checking accounts, and to prepaid, reloadable cards or debit cards.”
These restrictions are intended to prevent identity theft and provide filing safety to taxpayers.
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