Tuesday, April 17, 2018, is Tax Day in the U.S. this year. Is your financial institution prepared to identify possible fraudulent refunds?
You can help mitigate fraud by setting up batch-level criteria in the FedACH Risk® RDFI Alert Service to help identify incoming batches that contain Internal Revenue Service (IRS) tax refunds for your receivers. The only criteria field that needs to be completed is the “Company Entry Description.” It should read “TAX REF,” the description the IRS uses to identify refunds.
Give the criteria set a meaningful name and set up internal email addresses to receive alerts on batches containing transactions with this company entry description. Then use the FedLine Web® Solution to search for batch screens to drill down into the batch and see transaction detail. If there are multiple refunds going to the same receiver account, it could be an indication of possible fraud.
For more information about how the IRS sends refunds via direct deposit, review the Bureau of the Fiscal Service’s Direct Deposit of IRS Tax Refunds Resource page (Off-site) and the Direct Deposit of IRS Tax Refunds Resource File (Off-site).