Entering an incorrect routing or account number is one of the most common mistakes you can make when requesting your refund from the Internal Revenue Service (IRS). It is important to double check your account and routing numbers before signing and submitting.
In situations where errors occur, the IRS assumes no responsibility. However, errors are handled differently based on the types of mistakes made.
How the IRS handles different error scenarios
These solutions are applicable to both split refunds and regular direct deposits.
Scenario 1
You enter an incorrect account or routing number and the number doesn’t pass the IRS validation check.
Solution: TheIRS will send your entire refund via paper check instead of direct deposit.
Scenario 2
You enter an incorrect account or routing number and the number passes the validation check but your designated financial institution rejects and returns the deposit to IRS.
Solution: The IRS will issue a paper check for the amount of that deposit once it is received.
Scenario 3
You enter an account or routing number that belongs to someone else and your designated financial institution accepts the deposit from IRS.
Solution: The IRS doesn’t get involved in this. You must work directly with your financial institution to recover your funds.
Solution 4
You request a Refund Anticipation Loan (RAL) or Refund Anticipation Check (RAC) through your preparer or preparation software and your refund is not deposited in your financial institution. This usually occurs when you authorize the preparation fee to be taken from your refund. These types of refund are deposited directly into the preparer’s financial institution even if you didn’t request a direct deposit.
Solution: Contact your preparer’s financial institution for resolution.
Other ways an error can be solved
This is especially applicable for scenarios 3 and 4.
- If the return hasn’t already posted to the IRS system, you can ask the IRS to stop the direct deposit by calling them toll-free at 800-829-1040. This hotline is active from Monday to Friday, 7 am – 7pm.
- If the bank successfully recovers the funds and returns them to the IRS, the IRS will send a paper refund check to your last known address on file.
- If two weeks have passed since you contacted the financial institution and there are no results, file a Taxpayer Statement Regarding Refund Form 3911 to initiate a trace. The IRS will contact your bank on your behalf to attempt a recovery of your refund. Banks are given 90 days from the date of the initial trace input to respond to the request for information by the IRS. However, it may take up to 120 days to be resolved.
- If there are no funds or the bank simply refuses to make a return, the IRS cannot force the bank to do so. At this point, the case may then become a civil matter between you and the bank and/or the owner of the account into which the funds were deposited.
Where you are unable to resolve the issue, it may be best to seek professional advice to attempt to find a solution.
