Unexplained Refund Check

Got a refund check, but over a week has passed and no letter of explanation. I quickly went over my 2010 return, and did not see any obvious errors, but I must have made one. When I have some time I will dig into the return.

Is there any way I can tell what it is for by looking at the maze of numbers on the check. Assuming I get no explanation, and can not find errors in my return, what should I do? Cash the check? Hold it until I can get an answer from the IRS? Frame it and hang it on the wall?

Reply to
Larry Israel
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A few years ago, Nina Olsen, the IRS Taxpayer Advocate, issued her annual report to Congress of the biggest taxpayer problems, and this was one of them -- sending the refund check but delaying the explanation for a week or more.

It's still a big problem, but perhaps she has given up trying to get IRS to fix this. It seems to have fallen off her list.

I would suggest waiting another week or two. If you are outside of the US perhaps longer. If you are worried you don't deserve the check, hold it until you do receive an explanation. If after three weeks you have not yet heard, contact IRS.

Reply to
Arthur Kamlet

In my personal experience, it can take a (weeks, months) before getting an explanation from the IRS. If you cash it and have to give it back, you'll probably have to pay interest (more than you'll earn in a bank account). If I thought "I deserved it", I would probably cash it. If it is a large amount, and I thought I probably did not deserve it, I would hold onto it so as to avoid the interest penalty if the IRS has refunded this to me in error.

Reply to
Ron Rosenfeld

Typically, in my experience, it takes the IRS between 2 and 4 weeks to send the letter AFTER they send the refund check. So its not a surprise that its only been a week.

IF the refund check is for LESS than you were expecting I'd go ahead and cash the check - the IRS thinks you're entitled to AT LEAST that much as it is.

BUT if the refund check is for MORE than you were expecting I would NOT cash the check, I'd wait for the letter. If you cash the check and it turns out that you got more than you should have you'll be responsible for the repayment PLUS interest. By not cashing the check you could return it to the IRS for them to issue a correct one and you'd not be assessed any interest since technically there would be no repayment since you never cashed the check.

Lastly, if the difference is small - under $100 - and the check is for more, I'd cash the check. The current interest rate is right around 3% I believe. So on an extra $100 the interest on the repayment would only be $3 a YEAR - so who cares if they ask for the money back and you have to give them some interest. If they don't ask for it back in a year they likely never will, so the most you'd be out is $3. But if we're talking about real money, you may want to wait.

Gene E. Utterback, EA, RFC, ABA

Reply to
Gene E. Utterback, EA, RFC, AB

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