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IRS Explains Options for Dealing with Delayed Refunds

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The IRS generally issues refunds within a timeframe of 21 days or less. However, exceptions do apply. Incomplete or inaccurate returns can delay a refund. If a taxpayer's refund has not been received, an IRS representative can research the status only in the following situations:

  • It has been more than 21 days since the taxpayer received his/her e-file acceptance notification, or
  • It has been more than 6 weeks since the taxpayer mailed his/her paper return.

Refunds from amended returns are typically issued within 16 weeks. If the taxpayer files an "injured spouse" claim or files a return with an application for a tax identification number, delays may arise. Taxpayers who request refunds with tax withheld from a Form 1042-S should allow up to 6 months from the original due date of filing Form 1040NR or the date the taxpayer files the return to receive the refund.

It is estimated that 80% of taxpayers use e-file and direct deposit, which is the quickest way to obtain a refund. The refund is typically deposited into the taxpayer's checking or savings account. Any amounts directly deposited should be in the taxpayer's or spouse's name, or both, for a joint account. In order to receive the refund via direct deposit, the refund must be at least $1.00. (Note: An individual cannot split the refund if Form 8379, Injured Spouse Allocation, has been filed).

An individual may use a tax refund to purchase U.S. Treasury marketable securities and/or savings bonds. An additional option is to deposit the funds into a traditional, Roth or SEP-IRA account. The taxpayer must have an existing IRA account opened before the return is filed. However, some taxpayers may opt to receive a paper check sent to the address listed on the return.

If the taxpayer chooses the direct deposit method of receiving his or her refund, the refund can be split among up to three separate accounts by completing Form 8888, Allocation of Refund, and attaching it to the tax return. Form 8888 can also be used to purchase up to $5,000 in savings bonds.

In order to reduce fraud and identity theft, the IRS allows only three direct deposits into a single financial account or prepaid debit card per year. Taxpayers who exceed the maximum will receive a notice, and the refund will be issued via paper check.

Individuals may check the status of their refunds by visiting "Where's My Refund" online or through a mobile device. This tool is updated daily by the IRS. Taxpayers can download the agency's free mobile app, IRS2Go, from an IPhone or Android device. Individuals may also call the refund hotline at 800-829-1954. Be sure to have your 2016 tax return available to verify social security number, filing status, and the exact refund amount.

If a taxpayer receives a refund to which he or she is not entitled or for an amount that is more than expected, the taxpayer should not cash the check until a notice of explanation has been received. If the refund is less than expected, the check can still be cashed. If it is later determined by the IRS that more should have been received, an additional check will be issued. The taxpayer will also receive a notice explaining the difference. If a refund check is lost or stolen, the IRS can assist in obtaining a replacement.

For additional questions or inquiries, visit the IRS website at https://www.irs.gov/.

 
 
 
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