Direct Deposit – Wrong Account Number?
If you request your refund by check and someone else deposits it, it is a simple matter to have the IRS reverse the deposit and send you a replacement – but what happens if you put down the incorrect information for a direct deposit?
Believe it or not, this happens more often than most people think, and getting it straitened out may be tougher than you would believe.
First off – we can never encourage people enough to read their return before signing it (or the efile authorization). When your preparer hands you your copy of the return take it – and then go home. Sit down and read the return. Make sure the names and social security numbers match your records. If you don’t recognize a number somewhere call your preparer up and ask them about it. When you sign the return the IRS will hold you responsible for the numbers inside – if the preparer had put in some estimate and forgot to take it out, or dropped in an IRA contribution to show you how much you could save and accidentally left it in there, you are the one who will be paying those penalties and interest.
And if you are using direct deposit for your refund, check those numbers.
So, what if you forgot to check? What if your preparer imported your account numbers from 2009 and you closed that account? Or what if a digit was mixed up, or left out, or added in?
If the account number has an error in it you may be in luck. When the bank receives the wire from the IRS or State and cannot match it to an existing account they will refuse the transfer. The IRS or State will print a check and mail it to you in 2-6 weeks. So your only problem will be the increased wait on your money.
If an active account exists with the information you provided it is a little more complicated. The IRS does send the bank your name with the account information, and the bank should check that against the names on the account and send it back just like checking for an authorized signer – but it doesn’t always work that way. So where does that leave you?
First off – contact the bank. If you alert them ahead of time they may be able to catch the incoming funds are route them correctly. And if they can’t route them to you, they can at least put a hold on the funds to prevent someone else from spending them.
If it made it to the bank and they didn’t return it to the IRS, contact the IRS and have them put a trace on the funds. It may take up to 6 weeks for them to process it, but they will track down the account that received the funds and get them back to you.