The Internal Revenue Service says that it issues 9 out of 10 refunds in less than 21 days. If you fall into the 1-in-10 category and have not received your money as expected, you may be wondering where your refund is. Here’s what you can do.
Check the Status of Your Refund
Before you panic, check on the IRS’s progress regarding your refund using the IRS tool called Where’s My Refund? There’s an app called IRS2go that allows you to do the same thing. You can do this the day after your e-filed return has been accepted by the IRS; for paper returns, wait 21 days. These tools will tell you whether your refund has been approved and then whether it has been sent. Even when the usual 21-day period has passed for receiving a refund, you may just be premature in thinking your refund has been lost.
Determine the Reason for the Hold Up
If you’ve waited patiently for your refund but haven’t received it (the IRS tool continues to show “approved” or “sent” for a number of days), determine the reason you haven’t received your refund so you can take appropriate action.
FRAUD. The IRS may be holding up your refund because someone has already filed a tax return under your Social Security number. This type of identity theft is all too common. Usually, if you try to e-file a return after a fraudulent one has been filed, yours will be rejected and you can work with the IRS at this point to handle the problem. But you may have filed a paper return after a fraudulent return was filed; your refund claim won’t be easily processed.
What to do: Verify that this is the reason you haven’t received a refund. Then contact the IRS Identity Protection Specialized Unit by calling 800-908-4490. You’ll be directed on what to do (you’ll have to complete a special form). Expect that your refund will be delayed for months or longer.
IRS IS STILL PROCESSING. The IRS may be taking a closer look at your return before cutting a check. The return may be incomplete (e.g. you forgot to sign your paper return). The IRS won’t issue a refund until it obtains the missing information. Or the information you provided on the return may not match
up with IRS records. For example, you may claim to have paid estimated taxes but the IRS can’t find the payment and is checking records to verify your claim.
What do to: You may receive a letter from the IRS asking for missing information; follow the instructions in the letter so your return will be viewed as complete and the IRS can begin to process your refund. If you don’t receive a letter, or you simply want to determine the reason for the refund delay, call the IRS at 800-829-1040 and speak with an agent (the IRS won’t respond to a refund inquiry earlier than 21 days after you filed your return). Have a copy of your tax return in front of you so you can verify any information that the agent requests (e.g. adjusted gross income). You may be pleasantly surprised with what you hear, or at least you’ll know why your refund has been held up and what you can do to get things moving.
INCORRECT ROUTING OR BANK ACCOUNT NUMBER. The fastest way to receive a tax refund is to provide your bank account and routing number on your tax return. This enables the Treasury to directly deposit the refund into your account. If you make a mistake when providing these numbers, your refund could be held up or, even worse, misdirected.
What to do: Be clear that the IRS assumes no responsibility for any misdirection of refunds that result from a taxpayer or preparer error. If you did not provide complete bank account information, the IRS will send you a paper check, which takes longer than a direct deposit. If you provided incorrect information, your refund will be misdirected; you have to work this out directly with your bank. However, if you discover the error before the deposit has been made, call the IRS; it will stop payment and issue the refund to you.
The Bottom Line
If you can’t resolve your refund problem on your own or don’t want to personally hassle with the IRS, turn to a tax professional. However, make sure that the cost of professional fees is less than your outstanding refund amount. And when the check finally arrives, make sure you Get The Most From Your Tax Refund and Make These 5 Tax Resolutions For Next April 15 .