IRS inefficiencies cause taxpayers to foot the bill for refund check reissues after checks are stolen. It's nice of the government to do this, but it costs taxpayers a lot of $$$$. The stolen funds mostly never get recovered by the government.
Simple solutions I propose:
1) Using certified mail for these checks, so any anomaly can be easily tracked down using tracking data. While this may be more costly than regular mail, it's surely cheaper than the amount spent yearly for reissuing stolen checks.
2) Allowing direct deposit of prior year refunds. Currently, only refunds of one year prior (for now 2023) are eligible for direct deposit. This will decrease mailed checks significantly.
3) Alternatively, mail empty prepaid debit cards to taxpayers, who can only activate them with identity verification. Then refunds can then be deposited to the cards, and can be used for purchases or the funds can be transferred out to a bank account. There are surely other Fintech solutions as well.
"The Ways and Means Committee asked TIGTA and the IRS OIG to immediately begin an investigation into that theft to determine the volume, frequency, locations and methods used when IRS checks are stolen via USPS mail.
To come up with solutions that will address what taxpayers can do when they have a paper check stolen from the mail, including the option of switching to direct deposit and to identify what barriers exist to doing same.
Further, the Committee asked for an identification of what changes need to be made to prevent these thefts from happening in the future."
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