Refund deposited in wrong acct.....

[AZ-Tax]

Client daughter supposedly had 2005 IRS refund deposited in wrong checking acct by way of incorrect numbers. Tax Preparer out of business and IRS said they cannot help her. Daughter knows which bank refund was deposited in. Anyone had experience with this and if so would sure appreciate some guidance.

[Jiggers]

2005 Refund?

Client daughter supposedly had 2005 IRS refund deposited in wrong checking acct by way of incorrect numbers. Tax Preparer out of business and IRS said they cannot help her. Daughter knows which bank refund was deposited in. Anyone had experience with this and if so would sure appreciate some guidance.

2005 is a long time ago. I think she waited too long to start looking for it.

[Koss]

Two suggestions

(1) Taxpayer Advocate.

If the IRS is saying "can't help you," she may be talking to the wrong person at the IRS. There is a form used for lost refund checks. The form initiates a process for replacing a refund check that the taxpayer never received. This process is available even in cases where the missing check has actually been cashed by someone other than the taxpayer.

A similar process may be available for misdirected deposits.

(2) File suit in small claims court against the bank that actually received the deposit. The bank may not have any liability. They should have rejected the deposit if the name didn't match the account number, but that may not be their legal obligation. Even if it was an obligation, UCC sets time limits on this type of claim.

With that said, depending on the local rules and jurisdiction, filing the small claims case may give the taxpayer just enough discovery power to get information that will help the IRS get involved. I guess it all depends on the amount of the refund.

Even if the bank is not liable, the limited discovery process in small claims court can be used to compel the bank to disclose and confirm that a deposit was received, on a specific date, for a specific amount, and what account it went into.

And that's half the battle.

[dkss]

been there

I agree this is a little late to be looking for the money. But if this had happened this year, I would suggest contacting the bank in question, let them know that a wrong acct # was entered on the return, and let them investigate. Several years ago when this happened to me, the bank stated that the name on the electronic deposit should have been matched to the name on the account (which it wasn't) and should have been rejected by the bank. When the bank was told of the error, they backed the money out of the wrong account. BTW, this was discovered several weeks after the deposit.