Tax Tips

What Do I Do With An IRS Refund Check When I Wasn’t Owed A Refund?

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What should you do if you receive a tax refund check from the IRS that is unexpected, or that you suspect is incorrect or otherwise in error.  Do not cash the check. Instead, contact the IRS to determine the nature of the check and to confirm its propriety. Any refund that you receive by mistake must be returned to the IRS, to help insure that you won’t be assessed any unnecessary interest or penalties.

If you receive an erroneous paper refund check from the IRS:

  1. Do not cash the check.
  2. Write or type “VOID” in the endorsement section on the back of the check.
  3. Send the check to the correct IRS location listed here. The location is based on the city on the bottom text line in front of the words TAX REFUND, written on the refund check.
  4. Do not staple, bend, or paper clip the check.
  5. Include a note stating “Return of erroneous refund check because (and give a brief explanation of the reason for returning the check).”

You may also return the check in person, to your local IRS Taxpayer Assistance Center (“TAC”).

If you have already cashed the check, then you will need to repay the funds to the IRS as soon as possible. Follow these steps:

  1. Submit a check for the refunded amount to the appropriate IRS location listed here. The location is based on the city on the bottom text line in front of the words TAX REFUND, written on the refund check. If you no longer have access to a copy of the check, call the IRS toll-free at 800-829-1040 and explain to the assistor that you need information to repay a cashed refund check.
  2. Write on the check/money order: Payment of Erroneous Refund, the tax period for which the refund was issued, and your taxpayer identification number.
  3. Include a brief explanation of the reason for returning the refund.
  4. You may instead bring the repayment check to your local TAC.

It is important to note that repaying an erroneous refund in this manner may result in interest and/or penalties due to the IRS.

There is no guarantee that returning an uncashed refund check to the IRS will allow you to avoid interest and penalties. However, it is much more likely that IRS will assess interest and penalties if you cash the check and attempt to repay the funds later. Returning or repaying the refunded amount in a timely manner will also help mitigate any potential assessments.

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