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U.S. Treasury check verification: Tools to fight tax season fraud

Mary Ellen Biery

March 13, 2025

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The basics of verifying checks for government-issued payments

Fraudsters target government checks at tax time and beyond. Banks and credit unions have several tools, including a new one, to fight fraud through U.S. Treasury check verification.

Key topics covered in this post:

The growing need to verify Treasury checks
Security features to help validate U.S. Treasury checks
Treasury Check Verification System: New payee name validation
How fraud detection software strengthens check authentication

Confirming the legitimacy of tax refund checks

With tax season in full swing, financial institutions must be ready for an influx of U.S. Treasury checks as Americans receive their IRS refunds. Most IRS refunds are direct deposit, but fraudsters often target government-issued payments, making Treasury check verification an essential step in fraud prevention.

Fortunately, banks and credit unions have several tools at their disposal, including the Treasury Department’s Treasury Check Verification System (TCVS)—which recently introduced payee name validation to help institutions confirm the legitimacy of Treasury checks before processing them.

Find fraud faster and smarter.

Fraud detection software

The growing need to verify Treasury checks

U.S. Treasury checks remain a favorite target for fraudsters because they are guaranteed funds. In addition, under Regulation CC, the funds are made available to depositors the next business day.

The sheer volume of Treasury checks processed yearly makes authenticating the checks even more challenging. In 2024 alone, the Federal Reserve processed 36 million government checks valued at $1.75 trillion. For many people, the federal tax refund is often the largest single check they receive, so the personal or business impact of a fraudulently cashed check can be huge.

Synthetic ID fraud makes it harder to authenticate Treasury checks

A recent fraud case shows how increased synthetic identity theft and other scams reinforce the ongoing need to make sure federal government checks are legitimate.

In February 2025, a woman was indicted for her role in a multi-check U.S. Treasury fraud scheme, in which she deposited over $1.9 million in fraudulent Treasury checks using stolen identities. One of the victims, a Louisiana woman, expected an IRS refund check but later discovered it had been stolen and fraudulently deposited under another person’s name. By the time the fraud was detected, the suspect had already transferred thousands of dollars into personal accounts.

In part because of the fraud risks, the IRS recommends people have tax refunds directly deposited. In fact, 97% of refunds are delivered by direct deposit. Even so, 772,000 refunds totaling $674 million have already been issued in checks this year – just through February. In other words, authenticating federal checks is vital.

How to validate Treasury checks using security features

An important initial line of Treasury check fraud defense is for tellers and other staff accepting deposits to be able to spot counterfeits or altered documents when they are presented. Front-line workers can prevent fraud by manually verifying U.S. Treasury checks for several built-in security features.

The following features help distinguish genuine Treasury checks from counterfeits or altered documents:

Ultraviolet overprinting pattern – An invisible security pattern consisting of “FMS” or "FISCALSERVICE" appears under a black light. Any tampering with the amount box disrupts this pattern.
Treasury seal – The seal, located just to the right of the Statue of Liberty, identifies the Bureau of the Fiscal Service. Older checks may still show the Financial Management Service seal.
Bleeding ink – The Treasury seal contains black security ink that turns red when moisture is applied, making alterations easily detectable.
Microprinting – Certain areas of Treasury checks contain microprinted words that appear as a solid line to the naked eye but are visible under magnification. Counterfeit checks will often show a blurred line or series of dots instead.
Watermark – Genuine Treasury checks are printed on special watermarked paper. A check held up to the light shows the “U.S. TREASURY” watermark, and the watermark cannot be photocopied.

Despite these security features, fraudsters have become increasingly sophisticated, using high-resolution printers or altering check details while keeping the legitimate address intact. Mitek, a global leader in mobile deposit identity verification and fraud prevention, noted in a recent blog that missing watermark or ultraviolet overprinting might not be noticed in a busy branch or using deposit-image capture software for remote deposit.

In addition, fraudsters are constantly refining their tactics. In another recent Treasury check fraud case, two California people—including one who worked part-time as a bank teller—were indicted for bank fraud and conspiracy tied to a scheme to cash at least 339 stolen U.S. Treasury checks totaling more than $850,000.

Additional fraud prevention and detection measures are critical.

Treasury Check Verification System (TCVS): How it works & what’s new

Financial institutions can use the Treasury Check Verification System (TCVS) to find out if a check is a valid Treasury check. The Treasury Department’s TCVS is available through a public-facing website and an API (application programming interface).

To find a check in the TCVS, financial institutions need:

Check routing transit number
Check number
Check amount

However, until November 2024, financial institutions could not confirm whether the payee name matched Treasury records—a key gap in authenticating checks and detecting fraud. Late last year, the Treasury unveiled its new payee name validation feature. While only available via API, the feature enables financial institutions to confirm whether the payee name matches the check on record, helping prevent stolen or altered checks from being cashed.

“This enhanced version of the API portal is another tool in the fraud prevention toolbox,” noted Nancy DeGrandi, Manager of Federal Compliance Analysis and Research for Americas Credit Unions, who wrote about the feature on the association’s compliance blog.

Financial institutions already using the API portal for TCVS should immediately be able to obtain payee information for checks issued in the last 13 months, she said.

To enroll in the API portal and gain a key to it, institutions must:

Review the TCVS Terms and Conditions
Provide the financial institution’s name
Complete the signature page
Submitting additional questions and the request via email to [email protected]

DeGrandi said the review process likely takes a few weeks before institutions receive their API credentials.

Another government resource to mitigate fraud losses tied to Treasury checks is the Federal Reserve Bank Service’s FedDetect Duplicate Notification for Check Services (FedDetect Duplicate Notification). It can provide banks of first deposit (BOFDs) early notice of potential duplicate checks processed by the Federal Reserve Banks. In addition to a report on Treasury checks, FedDetect can provide reports for commercial checks deposited by your institution or another BOFD on the current day or within a specific date range.

While FedDetect Duplicate Notification and TCVS payee ID service add extra layers of security, they are not standalone solutions to Treasury check fraud. Banks and credit unions also need real-time fraud detection solutions to make sure federal government checks aren’t counterfeit or altered checks before they are processed.

How fraud detection software strengthens Treasury check security

Abrigo Fraud Detection has partnered with Mitek to help financial institutions identify fraudulent Treasury checks and other types of checks at the point of deposit—whether through mobile, ATM, or in-branch transactions. Texas National Bank recently implemented Abrigo’s fraud detection solution and identified and prevented over $377,000 in fraudulent check transactions within just two months. Here’s how the solution works: AI/ML-powered image analysis – It scans Treasury checks, analyzing check images with advanced AI models for anomalies, including incorrect formatting, missing security features, and suspicious alterations. Nationwide fraud data consortium – It leverages a database of known fraudulent checks to identify suspicious transactions. Configurable rules engine – It allows credit unions and banks to customize fraud detection parameters based on risk tolerance and evolving threats. Reducing false positives minimizes manual workloads and improves detection accuracy. Step-up authentication – It involves customers in verifying suspicious transactions for added security. End-to-end protection- It provides protection across teller systems, mobile deposits, and ATMs to detect forgeries, flag fraud, and streamline investigations with precision. By identifying fraudulent checks quickly, financial institutions can lower fraud losses and protect their customers and members.

Treasury checks: A constant need for authentication

Fraudsters are constantly evolving their tactics and will continue to target checks written by the federal government. Financial institutions can significantly reduce check fraud losses and protect their customers by combining front-line, manual security feature checks, TCVS payee verification, and AI-powered fraud detection.

This blog was written with the assistance of ChatGPT, an AI large language model, and was reviewed and revised by Abrigo's subject-matter expert.

Short-staffed? Abrigo provides short- and long-term staffing relief. See how Capital Bank used Abrigo to bolster its BSA program during a time of growth.

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About the Author

Mary Ellen Biery

Senior Strategist & Content Manager

Mary Ellen Biery is Senior Strategist & Content Manager at Abrigo, where she works with advisors and other experts to develop whitepapers, original research, and other resources that help financial institutions drive growth and manage risk. A former equities reporter for Dow Jones Newswires whose work has been published in

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U.S. Treasury check verification: Tools to fight tax season fraud

The basics of verifying checks for government-issued payments

Confirming the legitimacy of tax refund checks

Find fraud faster and smarter.

The growing need to verify Treasury checks

Synthetic ID fraud makes it harder to authenticate Treasury checks

How to validate Treasury checks using security features

Treasury Check Verification System (TCVS): How it works & what’s new

How fraud detection software strengthens Treasury check security

Treasury checks: A constant need for authentication

Short-staffed? Abrigo provides short- and long-term staffing relief. See how Capital Bank used Abrigo to bolster its BSA program during a time of growth.

Fast payments, faster fraud: Staying ahead of scammers

Texas National Bank amplifies fraud prevention with Abrigo Fraud Detection

AML/CFT & fraud hot topics for 2025: What to expect for Financial Crime

Mary Ellen Biery

Senior Strategist & Content Manager

About Abrigo