Fri, Jan 5, 2018
As tax season approaches (begins January 29th) credit unions should keep an eye out for tax scammers. In an effort to combat fraud and identity theft, in 2015 the IRS began limiting the number of refunds electronically deposited into a single financial account or pre-paid debit card to no more than three. The fourth and subsequent refunds automatically convert to a paper refund check and are mailed to the taxpayer.
According to the IRS, the vast majority of taxpayers are not affected by this limitation, however some taxpayers, such as families in which the parent's and children's refunds are deposited into a parent's account may be affected.
The direct deposit limit is in place to prevent criminals from easily obtaining multiple refunds and to protect taxpayers from preparers who obtain payment for their tax preparation services by depositing part or all of their clients' refunds into the preparers' own credit union accounts.
For more information, visit the IRS website.