[Pages H1351-H1353]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     RECOVERY OF STOLEN CHECKS ACT

  Mr. SMITH of Missouri. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 1155) to amend the Internal Revenue Code of 1986 to 
allow taxpayers to elect to receive certain replacement refunds 
electronically, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1155

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Recovery of Stolen Checks 
     Act''.

     SEC. 2. ELECTION TO RECEIVE CERTAIN REPLACEMENT REFUNDS 
                   ELECTRONICALLY.

       (a) In General.--Section 6402 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsection:
       ``(o) Election to Receive Certain Replacement Refunds by 
     Direct Deposit.--Not later than the date which is 6 months 
     after the date of the enactment of this subsection, the 
     Secretary shall prescribe regulations to establish procedures 
     to allow for taxpayers, which are otherwise eligible to 
     receive an amount by paper check in replacement of a lost or 
     stolen paper check which was previously sent by the Secretary 
     as a refund of an overpayment of tax, to elect to receive 
     such amount by direct deposit in lieu of receiving such 
     replacement paper check.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri (Mr. Smith) and the gentlewoman from Alabama (Ms. Sewell) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Missouri.


                             General Leave

  Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days in which to revise and extend their 
remarks and submit extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Missouri?
  There was no objection.
  Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise today in support of H.R. 1155, the Recovery of 
Stolen Checks Act.
  With the April 15 tax filing deadline right around the corner, we are 
reminded of the need to make the IRS more responsive to the American 
people. Unfortunately, the manner in which the IRS currently responds 
to stolen tax refund checks is truly insane.
  Right now, if someone has their refund check stolen out of the mail, 
the IRS will replace that stolen check by sending another one through 
the mail. It should surprise no one to learn that quite often that 
replacement check is also stolen out of the mail.
  There is no law keeping the IRS from sending a replacement check 
through a direct deposit to a bank. However, the IRS currently does not 
have procedures in place for a taxpayer to make such a request. This 
bill fixes that flaw.
  I wish to commend my Ways and Means Committee colleagues, 
Representatives Malliotakis, Kustoff, and Sewell, for their bipartisan 
leadership on this issue.
  In Representative Malliotakis' district alone, they have seen $3.8 
million in IRS tax refund checks stolen. Taxpayers that are victims of 
this crime need to be made whole. They do not need to jump through more 
hoops or deal with the hassle of seeing their replacement refund checks 
stolen as well.
  This legislation received unanimous approval in the Ways and Means 
Committee, and I encourage my colleagues to give it an equally strong 
bipartisan vote here in the House.
  Mr. Speaker, I reserve the balance of my time.
  Ms. SEWELL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am very proud today to join my colleague, 
Representative Malliotakis, in cosponsoring and speaking in favor of 
the Recovery of Stolen Checks Act.
  This bill requires the Treasury to make procedures that allow 
taxpayers to opt in to receiving a replacement refund by direct deposit 
after their paper checks have been lost or stolen in the mail.
  Right now, the Treasury Department is only allowed to continue 
sending a paper check to the same address, even though the check was 
stolen or lost at that very address. It is Congress' responsibility to 
give Treasury the ability to modernize, become more efficient, and most 
importantly, deliver much-needed payments to people that are relying on 
them as quickly as possible. This is a commonsense, straightforward, 
and urgent reform.
  Every year, millions of Americans eagerly await their tax refund, 
money that they have rightfully earned. Unfortunately, criminals have 
exploited weaknesses in our system, stealing and cashing checks that do 
not belong to them. This fraud not only robs individuals of their 
refunds but also costs taxpayers millions of dollars annually.
  The Recovery of Stolen Checks Act strengthens the government's 
ability to track and recover stolen refund checks. It empowers the U.S. 
Treasury and financial industries and institutions to act swiftly when 
fraud is detected, enabling that victim to get their payment much 
faster and that criminal to be held accountable.
  With this bill, stolen checks can be flagged and traced more 
efficiently, victims will experience a quicker resolution and recovery 
process, banks and financial institutions will have clearer guidelines 
to prevent fraudulent transactions, and taxpayer dollars will be better 
protected, reducing the losses due to fraud.
  Every dollar, Mr. Speaker, lost to fraud is a dollar taken from 
taxpayers. H.R. 1155 ensures that their hard-earned money is 
safeguarded and that criminals cannot exploit the system without 
consequences.
  By closing loopholes and enhancing the recovery efforts, this 
legislation protects the integrity of our tax system and restores trust 
in financial security.
  Mr. Speaker, I have had dozens of conversations with constituents who 
have spent months trying to receive a check from Treasury. In one 
instance, a constituent was sent two checks by the Treasury Department, 
neither delivered to her nor cashed by her before reaching out to my 
office for assistance. She just wanted the payment that she was owed.
  Instead, the Treasury Department told her that they would only 
continue mailing a paper check to the same address where it had failed 
to get to her multiple times.
  This policy is burdensome and it simply does not work. The caseworker 
on my staff continued to encounter cases just like this one, some 
taking over a year to resolve. This is way too long for the American 
public, and we need to do something about it. That is why this 
particular bill's resolution is common sense. I ask my colleagues to 
support it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SMITH of Missouri. Mr. Speaker, I yield such time as she may 
consume to the gentlewoman from New York (Ms. Malliotakis), the sponsor 
of this legislation.
  Ms. MALLIOTAKIS. Mr. Speaker, I thank the chairman and the Ways and 
Means Committee staff for working with me on this legislation to combat 
mail theft and fraud.
  A few months ago, I raised the issue of stolen checks to the Ways and 
Means Committee after my office had been slammed with constituent cases 
from taxpayers who have seen their hard-earned money stolen from them 
via check fraud.
  I, alongside my colleagues, Congresswoman Terri Sewell and 
Congressman David Kustoff, introduced H.R. 1155, the Recovery of Stolen 
Checks Act, a bipartisan bill that would allow taxpayers whose tax 
refunds were stolen in the mail to receive a replacement payment via 
direct deposit. This legislation passed out of the Ways and Means 
Committee last month on a bipartisan basis, and it was unanimous.

[[Page H1352]]

  In my district alone, we have seen 376 constituents who have had 
stolen IRS checks. The amount is staggering: $5.4 million, and that is 
in my district alone.
  Out of these 376 cases, 50 times checks were stolen twice, 7 times 
they were stolen 3 times, and in some cases, checks were even stolen 4 
times in a row from the same constituent.
  It has been reported that for IRS checks alone, approximately 40,000 
were stolen nationally in 2024 and that is up from 100 checks in 2022.
  The value stolen has been approximately $1 billion, and this has 
become a real business for criminal organizations and enterprises and 
the fraudsters who are preying upon American citizens.
  It is very unfortunate that we are seeing this hardship and stress 
placed on the intended recipients who have had to endure seeing their 
checks being stolen and then they have to wait months to sometimes see 
their replacement check also stolen.
  This is not just happening with IRS tax refunds. It is also happening 
with Social Security and other benefits that our constituents rely on.
  Approximately 10 percent of American taxpayers receive their tax 
refunds via paper checks, equating to about 10 million paper checks 
issued annually. While the majority of taxpayers opt for direct 
deposit, a significant number still receive refunds through traditional 
mail.
  The IRS plays a critical role in ensuring taxpayers receive their 
hard-earned refund securely and efficiently. However, outdated IT 
infrastructure and delivery systems have left many vulnerable to fraud 
and stolen tax reimbursement checks.
  Modernizing these systems is no longer optional. It is necessary to 
protect taxpayers, to enhance efficiency, and to reduce fraud. 
Obviously, there is still more work to be done. We still need the DOJ 
and our law enforcement partners to continue their investigations to 
find and prosecute these fraudsters. We are hearing of arrests and 
prosecutions on a regular basis, but we urge them to continue their 
good work.
  This is an essential first step in addressing the increasing 
frequency of mail theft. I am encouraged by President Trump's executive 
order last week titled, ``Modernizing Payments to and From America's 
Bank Account,'' which intends to phase out most paper checks by 
September of this year and modernize other government payment systems.
  I thank President Trump and Secretary Bessent for their quick and 
decisive actions here to address this matter. It was within weeks of me 
speaking with the Secretary that they issued this executive order.
  My legislation here today will ensure that in those cases where there 
are exceptions or accommodations, a direct deposit option will be 
available for the intended recipient if those physical checks are 
stolen--that was something the IRS had given us such a hard time 
about--so taxpayers can receive their payments via direct deposit when 
they needed replacement.
  I was also pleased to learn that the Bureau of Fiscal Service 
recently launched a pilot program to leverage existing technology and 
services offered by the U.S. Postal Service to track the transmittal of 
checks. I look forward to reviewing the results of this pilot program 
and working with the administration to modernize delivery systems 
across the Federal Government and ensure stronger safeguards against 
mail fraud in the future.
  Mr. Speaker, again, I thank the chairman and my colleagues for their 
work on this bill. I look forward to seeing this bill pass unanimously 
on the floor today as well. Let's protect American taxpayers and make 
sure they are no longer victims of this type of check fraud.

                              {time}  1715

  Ms. SEWELL. Mr. Speaker, I reserve the balance of my time.
  Mr. SMITH of Missouri. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Tennessee (Mr. Kustoff).
  Mr. KUSTOFF. Mr. Speaker, I thank Chairman Jason Smith for his 
leadership on this issue and this important piece of legislation, as 
well as the leadership of Representatives Malliotakis and Sewell.
  Mr. Speaker, over the last several years, the number of government 
checks stolen from the mail has increased dramatically.
  If I could, I will share just a few statistics:
  Between 2019 and 2022, there was an 87 percent increase in theft from 
mailboxes, according to the U.S. Postal Inspection Service.
  According to the Financial Crimes Enforcement Network, FinCEN, 
reports of check fraud doubled from 2021 to 2022.
  FinCEN's most recent report on check fraud found that between 
February and August of 2023, the bureau received over 15,000 individual 
reports about mail-theft-related check fraud.
  Now, this has been a problem in my district in west Tennessee, and we 
have heard it has been a problem throughout the country. It is well 
past time that we get mail theft in the United States under control. 
That does start with giving Federal law enforcement officers the tools 
and the resources that they need to detect, investigate, and prosecute 
those behind these thefts.
  We also have to ensure that victims of mail theft are taken care of 
and that they can access timely relief. That is why this bill, H.R. 
1155, the Recovery of Stolen Checks Act, is so important.
  Right now, it can take months and months for the IRS to issue a 
replacement for a stolen refund check. That is a long time. Due to the 
frequency of mail theft that is happening right now across this great 
Nation, many taxpayers are having their replacement checks stolen, as 
well. This is truly not acceptable. These outdated IRS regulations are 
partially to blame.
  The IRS' current process really makes no sense. It exacerbates check 
fraud. It creates more bureaucratic hurdles for U.S. taxpayers and 
ultimately makes it more difficult for Americans to access their hard-
earned dollars. For many American families, a delay in getting their 
tax refund has the potential to cause serious financial strain.
  This bill, the Recovery of Stolen Checks Act, will give victims of 
mail theft the option to receive their replacement payment through 
direct deposit instead of having to risk mailing another check.
  This is a simple fix, Mr. Speaker, and it will help expedite relief 
to affected taxpayers, keep government checks out of the hands of 
criminals, and ultimately make our government more efficient.
  Mr. Speaker, I urge all of our colleagues to support this bipartisan, 
commonsense piece of legislation which passed out of the Ways and Means 
Committee unanimously by a vote of 41-0.
  Ms. SEWELL. Mr. Speaker, I yield myself the balance of my time for 
the purpose of closing.
  Mr. Speaker, I am excited about the strong bipartisan support that 
H.R. 1155, the Recovery of Stolen Checks Act, has received. The bill 
will take a critical step toward combating financial fraud and 
protecting hardworking Americans from falling victim to check theft.
  Each year, countless Americans are targeted by criminals who steal 
and fraudulently cash their checks, causing financial hardship and 
eroding the trust in our banking system. It happens not just in tax 
refunds, as my colleagues have indicated. Increasingly, Social Security 
and SNAP benefits are also being stolen by these criminals.
  This bill strengthens law enforcement's ability to investigate and 
prosecute these crimes, ensuring that victims can recover the money and 
that the criminals are held accountable.
  I urge my colleagues to support this legislation for at least these 
three reasons: First, that the bill protects consumers from financial 
harm. Check fraud is not just an inconvenience, it is financially 
devastating to many families. When a check is stolen and cashed by 
criminals, victims are often left in a difficult situation.
  Secondly, this bill will also strengthen law enforcement's ability to 
combat check fraud. Criminals have become more sophisticated in their 
methods, and law enforcement needs stronger tools to fight back.
  Lastly, a financial system that cannot protect its users from fraud 
is a system in jeopardy. If consumers and businesses lose faith in 
their ability to

[[Page H1353]]

securely conduct transactions, our economy suffers as a whole. H.R. 
1155 ensures confidence in our banking system by ensuring that stolen 
checks can be recovered and that perpetrators face real consequences.
  Mr. Speaker, check fraud is a growing problem, but today, we, in a 
bipartisan way, in the Ways and Means Committee are finally taking 
commonsense, decisive action. This bill passed unanimously out of our 
committee, and I look forward to it passing unanimously out of this 
House. It is, once again, an opportunity for Republicans and Democrats 
to put partisanship aside and work together for the American people.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SMITH of Missouri. Mr. Speaker, I yield myself the balance of my 
time to close.
  This legislation will not only help taxpayers who have been victims 
of fraud, but it will also help combat fraud by eliminating 
opportunities for criminals to strike a second time.
  Check fraud is a major challenge in this country, and it has grown 
exponentially over the past several years. In fact, in 2022, the 
Treasury Department's Financial Crimes Enforcement Network reported 
over 680,000 instances of check fraud, doubling the previous year's 
total. In such an environment, it is unacceptable that at this moment 
the IRS does not have processes and procedures in place for taxpayers 
to request a replacement check through direct deposit.
  This bill is a simple solution to a serious and costly problem. I 
encourage all of my colleagues to support its passage, and I yield back 
the balance of my time.
  The SPEAKER pro tempore (Mr. Moore of North Carolina). The question 
is on the motion offered by the gentleman from Missouri (Mr. Smith) 
that the House suspend the rules and pass the bill, H.R. 1155, as 
amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________