What is the Safest Way to Get a Refund?

How safe is the direct deposit feature for having tax refunds issued directly to a checking or savings account? What happens if there’s a mistake in the bank account number or routing number? What can be done if there’s a mistake with the direct deposit information?

Safest way to claim your tax refundGenerally speaking, direct deposit is a relatively safe way to receive your tax refund. That’s because there’s no check to get lost in the mail and the IRS can send out refunds faster than by mailing a check. However, direct deposit isn’t completely safe. Taxpayers who have put incorrect bank account numbers in the direct deposit field have encountered numerous difficulties in retrieving their tax refund, sometimes resulting in losing the reimbursements forever. So my advice is: Always get a check, unless you are 100% sure that your bank info is correct.

The IRS can deposit your tax refund directly into your checking or savings account. The IRS publishes a calendar of when they send out direct deposits and mail out paper checks. You can check Publication 2043 to find out when your federal tax refund is likely to be deposited into your account.

Direct Deposit is Available at No Additional Charge

Direct deposit of your refund is a free service offered by the IRS and state tax agencies. Your tax preparer cannot charge you extra fees for using direct deposit (Treasury regulations governing tax professionals forbid this.)

Direct Deposit is Generally Safer than a Check

Since there’s no check to get lost in the mail or stolen by someone else, getting your refund by direct deposit is considered safer. However, you must make sure your bank information is 100% accurate.

Direct Deposits are Sent out Earlier than Paper Checks

Direct deposit faster because the IRS sends out direct deposits earlier than they mail out paper checks. Generally, the IRS transmits direct deposits a full seven days before they mail out a paper check.

Double Check Your Direct Deposit Information

Be sure to verify and check the Bank Account Number and Routing Number when filling out the part of the direct deposit in your tax return. These numbers are just as critical as making sure you have your correct name, address, and Social Security Number. Prepare to call your bank and to ask if you are not sure what these information are.

What Happens if You’ve Accidentally Put Down the Wrong Bank Information?

You should verify your bank account information before sending in your tax return. However, if you discover a mistake in the direct deposit area, you should call the IRS immediately at 1-800-829-1040 and ask that the IRS convert the refund to a paper check.

The IRS will assume that the information you put in the direct deposit area is correct and will initiate the direct deposit in as little as eight days. In fact, the IRS has said that the “IRS assumes no responsibility for taxpayer error” as a result of inaccurate direct deposit information.

Many taxpayers have reported losing their entire tax refunds by merely having an incorrect direct deposit. This is truly heart-breaking.

What to Do When Your Refund is Sent to the Wrong Bank Account

Verify the direct deposit information on your tax return versus the actual bank routing number and bank account number.

If the numbers you indicated on your tax return are correct, then call the IRS can ask them to initiate a refund trace to recover your refund.

If the numbers you indicated on your tax return are incorrect, then you’ll need to deal directly with the bank in which your refund was deposited. You’ll know which bank and bank account it is since you have the bank numbers listed on your tax return.

  1. Find the bank by looking up which bank is associated with the routing number shown on your tax return.
  2. Talk to the ACH manager at that bank.
  3. Persuade the bank to send the refund back to the IRS.
  4. Call the IRS and explain that the bank will be sending back the refund.
  5. Ask the IRS agent to fill out a Taxpayer Advocate Service Request (Form 911) to route your case to the taxpayer advocate.
  6. When the Advocate contacts you, explain that you want this incident added to their annual report as a direct deposit error.
  7. In the future, always get a check, unless you are 100% sure that your bank info is correct.