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How to Recover Misdirected Refunds?


How do you recover misdirected refunds?

Proposed regulations formalize procedures for reporting, identifying and recovering misdirected refunds from direct-deposit funds. The procedure will apply to your employees.

A missing direct-deposit refund can be recouped as follows:


• File Form 3911, Taxpayer Statement Regarding Refund;

• Call IRS customer service at 800-829-1040 (individuals) or 800-829-4933 (businesses);

• Contact the Taxpayer Advocate Service at 860-594- 9100; or

• Visit an IRS Taxpayer Assistance Center.


Once the IRS has determined that a direct deposit was issued, it initiates a refund trace. A replacement refund generally is issued after a misdirected direct deposit is refunded to the IRS by the financial institution overseeing the account in which it was mistakenly deposited. The proposed regs allow the IRS to reduce a refund by any outstanding tax liability or other offset required by law. Such offsets are not considered misdirected deposits. [REG-116163-19; 84 F.R. 70462-70466, tip courtesy of AIPB]


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