Compliance Question of the Week

What should be done if an IRS refund direct deposit went into the wrong account?

It depends on where the error occurred, but in all cases, the person who received the deposit in error is not entitled to the funds.

If the credit union made the error, then you need to correct the error per Regulation E.

If the Internal Revenue Service (IRS) made the error, the person who filed the tax return needs to contact the IRS customer service at 800.829.1040.  The IRS will issue a recall of the direct deposit and send the return filer a new refund by check.

If the filer entered the incorrect routing or account number, the IRS will not provide any help, as it assumes no responsibility for tax preparer or taxpayer errors. It is the responsibility of the person filing the return to verify the account and routing numbers and double check for accuracy.  While the IRS suggests the filer work directly with the respective financial institution to recover funds, the credit union also has no responsibility for the error.  Due to privacy, you are not allowed to provide any information concerning the member whose account the payment went into.  You can possibly work as an intermediary, but ultimately this is a civil issue between the filer and the person to whose account they directed the payment be made.

Related Links

12 CFR 1005.11
IRS FAQ Refund Inquiries IRS Error

IRS FAQ Refund Inquire wrong #


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News.