Compliance Question of the Week
March 12, 2013
March 12, 2013
What should be done if an Internal Revenue Service (IRS) tax refund direct deposit went into the wrong account?
The steps to take depend 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 per Regulation E, the credit union must correct the error.
If the 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.
The IRS assumes no responsibility for tax preparer or taxpayer errors, so if the filer entered the incorrect routing or account number, the IRS will not provide any help. It is the responsibility of the person filing the return to verify the account and routing number and to 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, the credit union is also not allowed to provide any information concerning the member whose account received the payment in error. The credit union can possibly work as an intermediary, but ultimately this is a civil issue between the filer and the person whose account received the deposit.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.
Posted in Compliance News.