How to Prevent Tax Refund Fraud After a Death

How Tax Refund Fraud Against the Deceased Works

The scheme is simple. A criminal files a tax return using a deceased person's Social Security number before the estate's executor files the legitimate final return. The fraudulent return claims a large refund — often by fabricating W-2 income or inflating deductions — and directs the payment to an account the criminal controls. By the time the IRS processes the real return and flags the duplicate, the money is gone.

Death reports and agency records are not updated instantly. The IRS and SSA processes can be delayed, and an executor may encounter a fraudulent return when filing the legitimate final return.

Criminals can use deceased identities to file fraudulent tax returns and intercept refunds. A deceased person cannot dispute a fraudulent return themselves.

A Practical Filing Sequence

Timing determines whether you prevent the fraud or spend months cleaning it up.

Step 1: File IRS Form 56. Form 56 (Notice Concerning Fiduciary Relationship) tells the IRS that you're the legal representative of the estate and helps route tax correspondence to your address. This can reduce the chance that correspondence sent to the deceased's address is intercepted, but it does not itself block a fraudulent return from being filed.

File Form 56 once you have Letters Testamentary or Letters of Administration. If probate is moving slowly, use the IRS's current instructions to confirm what steps are available before your court documents are issued.

Step 2: File the final Form 1040. The deceased's final tax return covers income from January 1 through the date of death. File it by the applicable deadline, using current IRS instructions and complete income documents (W-2s, 1099s). Filing promptly once the required records are available can reduce the window for a fraudulent return to be filed first.

Write "DECEASED" across the top of the return, followed by the decedent's name and date of death. If a refund is due and you're not the surviving spouse, you may also need to file Form 1310 (Statement of Person Claiming Refund Due a Deceased Taxpayer).

What to Do If a Fraudulent Return Was Already Filed

If you file the final 1040 and the IRS rejects it because a return has already been processed under that SSN, that may indicate a duplicate or fraudulent return. Check with the IRS about the reason for the rejection.

Don't panic, but act fast. Follow the current instructions in IRS Identity Theft Central for a fraudulent return filed using a deceased person's identity. Keep your death certificate and proof of authority available in case the IRS requests them.

Use the IRS's current instructions for case updates and keep copies of all correspondence.

Beyond the IRS

Tax refund fraud is one form of posthumous financial exploitation. The same vulnerability window that lets criminals file false returns also exposes the deceased to credit fraud, medical identity theft, utility fraud, and synthetic identity construction. Each one requires its own set of preventive actions — credit bureau notifications, data broker removals, account closures, and mail redirection — running in parallel.

The Identity Theft Prevention After Death toolkit puts all of these steps into a single chronological timeline, starting with the actions that matter most in the first week and working through the longer-term protections over the following months. It includes a Form 56 walkthrough, a cover letter template, and a tracking system so you know exactly what's been filed and what still needs attention.