Today's tax question comes from K.Y. in California. She asks:
"For my 2005 tax refund, I've accidentally provided the IRS with a wrong bank account number for direct deposit. After calling the IRS and bank numerous times, and researching on the web, it looks like I am not going to see my $5000 refund ever again."
"I know the exact routing number, account number (not my account) and date of deposit of the refund. I've placed a couple of traces with the IRS - since it is my mistake, they will not do anything about it. The bank would not do anything to help me with it, even though the refund was deposited to another account within the same bank (same routing number, just slightly different account number). I've gone down to the branch, submitted an investigation of a missing credit etc.
"Aren't banks obligated to check the refund with the SSN or name of the recipient? Is it criminal or wrong for the recipient account to keep the money? Is there anything else, besides hiring an expensive attorney, that I can do to get my refund back without running around, like I have been the last 6 months? Any information would be helpful."
What a predicament! When filling out the direct deposit section of the tax return, I triple check the bank routing and account numbers. And you should too. Even the slightest mistake can have dire consequences, as you found out.
Once the IRS issues a refund check, the matter is between you and your bank. You will need to somehow force the bank to investigate the matter, and urge the other person to pay back the money that was incorrectly deposited into their account. According to IRS spokesperson Jesse Weller,
"When requesting a directly deposited refund, taxpayers should carefully
check to make sure they have accurately entered the financial
institution routing number and account number.
Once the IRS has deposited a refund into the account as directed by the
taxpayer, the Service cannot recall it. Any subsequent action would be
conducted between the taxpayer and the financial institution."
Bottom line? The issue is now between you and your bank.
Learn more about direct deposits of federal tax refunds.