According to the IRS, the average refund issued for the 2023 tax year was $2,869. Typically, the agency issues tax refunds within 21 calendar days.
However, just because the IRS issues you a refund it doesn’t mean there won’t be any hiccups in getting it — especially if you’ve opted out of the direct deposit option.
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Such was the case for Atlanta surgeon Bennett Grimm. According to the Wall Street Journal, Grimm received an IRS letter this past February stating that the agency had processed a 2021 amended tax return of his, and that his refund was set to arrive by check in two to three weeks.
By May, the check still hadn’t arrived and Bennett’s accountant requested a new one. However, the second issued check was ultimately stolen and deposited fraudulently.
Grimm is now waiting on a third refund check for $96,000, which is what he’s owed following the sale of his medical practice.
Here’s what to do if your tax refund goes missing — and how to protect yourself going forward.
When your tax refund goes missing in the mail
The IRS reports that 80% of taxpayers opt to receive their refunds by direct deposit. With this option, everything tends to go smoothly.
However, for those who prefer to receive a tax refund via check in the mail, things can sometimes get a little dicey. That’s what happened to Grimm, who’s now awaiting a large sum of money that may have otherwise arrived on time had he chosen direct deposit.
As it stands, identity theft is a major issue for the IRS.
As of April 2024, the IRS was facing a 500,000-case backlog due to fraudulently filed returns. In these situations, the IRS will typically withhold a refund until the issue is resolved — which, on average, takes longer than 22 months.
But Grimm’s situation is different. It’s not that a criminal filed a return in Grimm’s name and attempted to steal his refund. Rather, the return itself was legitimate, but the refund check issued by the IRS never made its way to its intended recipient.
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How to protect your tax return from fraud
If you don’t want to end up in a situation like Grimm’s, the solution can be relatively simple. Instead of requesting a check by mail, sign up for direct deposit.
The IRS says it uses the same electronic transfer system for refunds as it does to deposit almost 98% of Social Security and Veterans Affairs benefits into millions of accounts each year. So while a glitch is possible, it’s highly unlikely.
“We strongly urge direct deposit,” IRS Commissioner Danny Werfel told the WSJ. “It’s the fastest and safest way for us to get taxpayers their refunds.”
The IRS also says that combining direct deposit with an electronically filed return is the best way to avoid a delay in getting your refund. This way, not only will your refund have significantly less risk of getting lost or stolen, but your return itself is guaranteed to make its way to the IRS.
Meanwhile, if you’re expecting an IRS refund by mail and it hasn’t shown up, you may want to contact the agency at 800-829-1954 or 800-829-1040 and ask them to initiate a trace.
If the check wasn’t cashed, which would be the case if it simply got lost in the mail, then the IRS will cancel the initial refund check and issue a new one.
However, if your missing refund check was cashed, like it was for Grimm, you’ll need to complete some more paperwork for the IRS to investigate the matter. It can take up to six weeks for the IRS to complete an investigation and issue a new refund in that situation.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
