A third-party IRS check is a refund check issued to one taxpayer who signed it over to a different person by endorsing the back of the check with a signature. The new check holder may then receive the funds by cash or deposit by any institution that honors third-party checks. Many banks, check-cashing stores and even convenience stores will cash your third-party IRS check because they know the check is valid. The ease with which a person could commit fraud using a third-party check scheme has caused many institutions to forbid third-party transactions; those that allow them may require you identify yourself and the other party named by the third-party endorsement.
Check the third-party endorsement on the back of the check. The person the IRS issues the check to must sign the endorsement area and write “Pay to the order of”, followed by the name of the third-party person. The third party must also sign in the endorsement area. You may not cash a third-party IRS check that is not properly endorsed.
Call the bank you wish to cash the check at and verify whether the institution will allow the transaction. Some banks do not authorize third-party transactions, even for IRS checks.
Take the check to the bank. Most banks that accept third-party transactions require both parties to be present and to produce a photo ID when the check is cashed.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.