Introduction Welcome to Your IRS Refund. In this book you will find all the information you need about an IRS refund, from the options that you have to get your refund, to getting a bigger refund, and getting it faster. In addition, we include little known IRS refund topics, like what to do when you have an expired refund, what to do if you get an unexpected IRS refund and much more. A must for those seeking to increase their refund or their knowledge about the IRS refund process. Cordially, Cora Parks Table of Contents Thinking About A RAL Refund? Think Again ......................................................................................... 3 Refund Options ............................................................................................................................................. 5 Time To Claim A Refund: The Two Vs Three Year Rule ................................................................................. 6 Losing Your Refund Due To Late Filing? Financial Disability May Be Your Savior ...................................... 7 Does Your Spouse Owe Debts? Keep Your Refund With Injured Spouse .................................................... 9 Let IRS Figure Your Tax Or Your Refund ...................................................................................................... 10 Supersize My Refund ........................................................................................................................ 14 Check and Double Check: IRS Replacement Checks ................................................................................... 17 IRS Erroneous Refunds: Today’s Check, Tomorrow’s Regret ...................................................................... 20 No Direct Deposit, Guaranteed Return............................................................................................... 22 Need A “Real” Rapid Refund? Here’s How To Get It .................................................................................. 24 Thinking About A RAL Refund? Think Again. In the month of January, the early filers will bombard the nation's tax offices, looking to get their federal tax refund as quickly as possible. Most services offer same day, 24, and 48 hour refunds. These "refunds" are not your actual federal refund from the IRS. They don't process returns that quickly. These are loans against your refund that allow you to get a advance loan against your federal refund. When your federal return is processed, usually within 7 to 21 days, the tax preparer, obtains the refund from the IRS. The process seems easy enough but it comes with a steep price. Refund Anticipation Loans, or RALs as they are more commonly known, increase the costs of tax preparation significantly. Some preparers have charged as "little" as $500 to as much as 50% of the refund. If you're that desperate that you need to pay 50 cents on the dollar for your refund, this article may be lost on you. But for those who were not aware of the prohibitive costs involved, and if you can wait a minimum of 10 to 21 days, you will save hundreds of dollars in fees. Electronic filing allows your return to be transmitted to the IRS without the long wait associated with a return sent by mail. When the return is processed, assuming there are no internal matters that would require that your refund be delayed, for example, injured spouse claims, bankruptcy, first time filer, non filer, or examination, your refund will be delivered to you in as little as 7 business days, up to the maximum of 21 business days, depending on the acceptance date of your return (Generally, for a refund to be issued within 7 days, it will need to be accepted into the IRS system no later than 10:00 am the Thursday prior. Returns that are accepted after 10 am Thursday will generally be available within 14 business days, assuming direct deposit was requested and not mail. Refund checks requested via mail require an additional 7 business days for processing. Conversely, a return that is mailed into the IRS can take a minimum of 4 weeks up to 6 weeks to process. So, if your preparer asks you if you want to get your refund "superfast", tell him that you can accomplish that through electronic filing. Better yet, learn how to prepare your own return and transmit it for free directly at the IRS website, www.irs.gov. Refund Options I’ll bet that you did not know that on your federal return, you have options regarding the receipt and distribution of your refund should you not owe past debts. In summary, these are: 1. Whole net refund received as a check in the mail to the address of record. This is the traditional method. 2. Whole net refund received via direct deposit to a savings or checking account that you designate on your 1040 series form. Make sure that both the routing number and account number are correct before mailing or transmitting electronically. In addition, unless the account is a business account, make sure you check with the financial institution before having the funds go to the account if your name is not on the account. 3. Refund direct deposited but into more than one account. With Form 8888, Direct Deposit of Refund To More Than One Account, you can designate that your net refund be distributed into more than one account. Again, the admonitions under item # 2 remain in effect. 4. Whole or partial net refund applied to the following year’s tax. You may designate to receive part of your refund now and allow the IRS to keep the different on your account for the following year. Since this choice is irrevocable (with very few exceptions), if you have any doubts whatsoever, DO NOT choose this option. There you have it. To obtain Form 8888, go to www.irs.gov, forms and publications, and select Form 8888. Time to Claim a Refund: The Two versus Three Year Rule As most of you know, there is a statute of limitations as to when a refund can be claimed or a reduction in tax can take place that would result in a refund of tax already paid. That statute states the following: In order to claim to a refund, the claim for refund must be filed no later than three years from the due date of the return not including extensions. This means that if you are expecting a refund from a 2009 federal return, you have until April 15, 2013 in order to file to obtain the full refund amount as shown on the return. However, if through an examination or audit of your return by the Internal Revenue Service results in a balance due, you pay the amount due, later find substantiation that will result in either a reduction or elimination of the tax that was assessed; you have two years after the tax was paid in order to claim a refund. Losing Your Refund Due to Late Filing? Financial Disability Might Be Your Savior. There is a statute (deadline) to file a federal return and obtain a refund. That deadline is three years from the due date of the return without regard to extensions. However, this deadline does not apply if you are able to show financial disability during the time period of the return. Financial disability is the inability to manage your day to day financial affairs due to a physical or medical impairment determined by a medical professional to either end with your death (yikes!) or will last more than one year. This means that if you are filing a 2005 tax return, your period of disability would take place before or during the year of 2005 in order to qualify in terms of time. To initiate the claim of financial disability, one should include the following along with the return claiming the refund: 1. A statement from a medical professional that includes the following: a. The name and description of your physical or mental impairment. b. A statement from the physician stating that this impairment prevented you from managing your financial affairs. This statement also must attest to fact that the impairment will either result in your death, or that it has, or is expected to last a minimum of twelve months and in the medical professional’s opinion, quantifying (in months, days, or years) just how long that the impairment is expected to last. c. The physician’s signature preceded by the following statement. “I hereby certify that to the best of my knowledge and belief, the representations above are true, correct, and complete.” 2. A statement by the individual filing for the refund that no one else, including the spouse if married filing jointly, was authorized to act on your behalf in your financial matters during the period of disability. If at anytime anyone was authorized to act on your behalf, then you are not considered to be financially disabled during that period of time. If someone acted for you at any time, you are required to provide the exact dates in which the individual was authorized to act for you such that this time period may be considered against the full time period in question. It may take more than eight weeks for the return to process. If you have not received the refund or any correspondence regarding the status, contact the IRS at 1-800-829- 0922. Does Your Spouse Owe Debts? Keep Your Refund With Injured Spouse. If you are married filing a joint return with your spouse, and the spouse owes debts such as child support, student loans, etc, that are subject to offset the combined total of both spouses federal refunds, the spouse not liable for the debt (commonly known as the “injured spouse”), can elect to file Form 8379, Injured Spouse Allocation, to claim their portion of the refund. The spouse, whose portion of a joint income tax overpayment was or will be offset to a tax or non-tax debt for which he/she is not liable, is known as the "injured spouse." The injured spouse must file Form 8379, Injured Spouse Allocation, to request his/her portion of the joint refund. Ideally, this form should be filed with the current year’s tax return, whether it is filed electronically or mailed in. However, if you find that you may qualify for this relief, and were not aware of it, you may file Form 8379 for a previous tax period as long as your claim is filed within the applicable statute limitations discussed in the blog topic: Claim for Refund. The injured spouse must have made payments such as Federal Income Tax Withheld from wages or Estimated Tax payments, unless Earned Income Tax Credit (EITC) or other refundable credits were claimed on the joint return. The time period for processing an injured spouse claim is up to eleven weeks if you filed it with your current year’s return electronically and up to thirteen weeks if you file it via mail. To check the status of your injured spouse claim at any time, contact the IRS at 1- 800-829-0922 Monday through Friday between the hours of 7am-10pm local time. Let IRS Figure Your Tax or Your Refund You are filling out your tax return, run into a jam and just can’t quite seem to get a handle on completing it. You wish to yourself that IRS could finish filling this form out for you. One of the little known services available to the average person is for the IRS to figure your tax or your refund. If you qualify, the IRS will not only figure your tax, but will compute the credit for the elderly and disabled, the earned income credit, and the new making work pay credit. You qualify for the IRS to figure your tax if you meet the following criteria: 1. You do not choose direct deposit as a method of refund receipt. 2. You do not want any part of your refund applied to estimated taxes for 2010. 3. You received income is only from the following sources: a. wages, salaries, and tips, b. interest and dividends c. taxable social security benefits d. unemployment compensation e. IRA distributions f. Pensions and annuities. 4. Your taxable income is less than 100,000. 5. You do not itemize your deductions on Schedule A, Form 1040 6. You do not file any of the following forms: a. Form 2555, Foreign Earned Income or Form 2555-EZ, Foreign Earned Income Exclusion. b. Form 4137, Social Security and Medicare Tax on Unreported Tip Income c. Form 4970, Tax on Accumulation Distribution of Trusts d. Form 4972, Tax on Lump Sum Distributions e. Form 6198, At Risk Limitations f. Form 6251, Alternative Minimum Tax-Individuals g. Form 8606, Nondeductible IRAs h. Form 8615, Tax for Certain Children Who Have Investment Income of More Than 1,900. i. Form 8814, Parents’ Election To Report Child’s Interest and Dividends j. Form 8839, Qualified Adoption Expenses k. Form 8853, Archer MSAs and Long Term Care Insurance Contracts l. Form 8889, Health Savings Accounts m. Form 8915, Qualified Hurricane Retirement Plan Distributions and Repayments n. Form 8919, Uncollected Social Security and Medicare Tax on Wages o. Form 8930, Qualified Disaster Recovery Assistance Retirement Plan Distributions and Repayments. If you have passed this battery of tests, here is how you prepare the tax return to be sent to the Internal Revenue Service. 1. Complete your name, address, and social security number and the same information for your spouse if married filing a joint return. 2. Complete the line items as they apply to you. This means that on any lines that you complete that require a schedule or form be attached, make sure to attach that form or schedule. a. Form 1040EZ, lines 1-9b. Do not complete lines 10-13. Joint filers need to show separately the income belonging to each spouse on line 6. b. Form 1040A, lines 1-27 and lines 29-33, 36 and lines 38-43. Do not complete line 28, 30, 34, 35, 37, 41a, 43 and 45-49. Joint filers need to show separately the income belonging to each spouse next to line 27. c. Form 1040, lines 1-43 and lines 45-70. Joint filers need to show separately the income belonging to each spouse next to line 37, Adjusted Gross Income. IRS will compute line 44. Do not complete line 54- 55, 60, 71-76. 3. Enter your federal income tax withheld from forms W-2, box 2 or 1099, box 4 on the applicable for federal income tax withheld. a. If estimated tax payments were made, enter these payments as follows: i. Line 38 for 1040A filers ii. Line 62 for 1040 filers 4. If claiming the Credit for the Elderly and Disabled, attach Schedule R and enter “CFE” next to line 30 for 1040A filers or line 53 for 1040 filers. In addition, remember to check the appropriate box on the Schedule R, Part 1 for your age and filing status. If applicable, complete Parts 2 and 3, lines 11 and 13. 5. If claiming the Earned Income Credit, enter “EIC” next to the line for the Earned Income Credit. a. Form 1040EZ filers, Line 9a. Nontaxable combat pay, Line 9b b. Form 1040A filers, Line 41a. Nontaxable combat pay, Line 41b. If you have a qualifying child, you must complete Schedule EIC, Earned Income Credit and enter the social security number for each qualifying person. c. Form 1040 filers, Line 64a. Nontaxable combat pay, Line 64b. If you have a qualifying child, you must complete Schedule EIC, Earned Income Credit and enter the social security number for each qualifying person. 6. If claiming the Making Work Pay Credit, enter “MWPC” next to the line for the Making Work Pay Credit. a. Form 1040EZ filers, Line 8. b. Form 1040A filers, Line 40. Attach Schedule M, Making Work Pay Credit. If either you or your spouse received nontaxable veteran’s disability or death benefits, enter “VA” next to line 40. If either you or your spouse received nontaxable combat pay, did not file Form 8812, and did not enter an amount on line 41b, enter “NCP” next to line 40. c. Form 1040 filers, Line 63. Attach Schedule M, Making Work Pay Credit. If either you or your spouse received nontaxable veteran’s disability or death benefits, enter “VA” next to line 40. If either you or your spouse received nontaxable combat pay, did not file Form 8812, and did not enter an amount on line 41b, enter “NCP” next to line 40. 7. Attach your Forms W-2 and 1099s that show federal income withheld. 8. If you want to designate another person to speak to the IRS on your behalf regarding the return, check yes in the third party designee area of your return and enter the individual’s name, phone number, and their five digit personal identification number (PIN). 9. Sign, date your return, and enter your occupation. If a joint return, both must sign. Enter your daytime phone number to allow IRS to contact you if needed. 10. The return must be mailed. Mail the return to the Service Center that services the area in which you live. This information can be found in the instruction book for your form or at www.irs.gov. Supersize My Refund Have you filed your tax return hoping for at least as much of a refund or substantially more than the previous year only to find that the amount seems to get smaller? Let’s just be honest. Before your taxes are prepared, you tell your preparer ever so humbly that “I hope that I don’t owe”. After you find that you don’t owe, your next question is "How much is my refund?" It seems that for individuals that have been filing for any length of time, refunds less than 1000 dollars seem to leave them crestfallen. They look to the preparer for answers, as though the preparer can “fix it and make it better”. For the answers that you seek, look no further than your own back yard. Barring your eligibility for substantial refundable government tax credits, like the Earned Income Credit and Additional Child Tax Credit, which guarantees you a refund come tax time, you will have to “create your own refund”, so to speak. This does not mean that you cheat on a paper or electronic income tax filing until you are satisfied with the results. This means that you look at your tax situation from year to year; counting the costs and make decisions that will have the lowest tax consequence. You might think that the tax rate from 2008 has increased for tax year 2009. Actually, though the tax rates stay the same, the amount of taxable income decreased rather than increased. This means that all things being equal, if you received a refund last year, your refund on the exact same income would be higher. If this is the case, then what gives with the smaller refund? This topic is an invitation for you to analyze your personal tax situation from the previous year to the current in order to explain the difference. Though each situation and circumstance is unique unto itself, here is a list of the more common reasons why your refunds are “wimpy”. 1. Single, no dependents, with no credits or deductions. a. The common ailment that befalls the great majority of individuals. If you want a larger refund, you’ll need to pay more as you go. This means increasing your withholding on your form W4 from your employer. If you are unable or unwilling to have more taxes withheld, try a few of these time honored traditions to refund increase. i. Get married. The taxable income rate for joint filers is lower than that of single filers. However, this will only work if you file together. Otherwise, getting married but filing a separate return in some cases can leave you worse off than if you had been a single filer. ii. Have or adopt a child or children. Between the dependency exemption, child tax credit, adoption credit, education credit, child and dependent care expense, tuition and fees deduction, earned income tax credit, and additional child tax credit, kids are an income tax return bonanza. iii. Buy a home. Five Words. First Time Homebuyer Tax Credit. Began in 2009 and scheduled to expire in April 2010, this mother of all credits is currently taking the tax world by storm and single handedly motivating people to buy and become homeowners. The up to 8,000 dollar credit doesn’t hurt either. iv. Return to college. With many individuals out of work, now’s a good time to return to college. The best part is that the current law fully supports you in this worthwhile endeavor. The increase in the amount and the eligibility of the education credits, made up of the Hope Credit and Lifetime Learning Credits, make it cool to go to school. 2. Having a onetime unique tax consequence whose net affect increases the tax due, there decreasing the amount of refund that you receive had this event not occurred. The best way to insure that your refund doesn’t drop significantly should these events occur would be to have a goodly amount of federal income tax withheld (or make estimated tax payments) such that money paid in more than offsets the increase in tax. Examples of this are the following: a. Selling stock or other property. The increase in value added to your regular income put you in a higher tax bracket. b. Taking money out a 401K or IRA. The money that you withdraw from the 401K or IRA was not tax deferred and you do not qualify for an exception to the 10 % penalty. c. Getting divorced. Going from the comfort of the joint filing, the lower taxable income rates, the other person’s withholding being able to cover your shortfall, now gone. You will now have to look at your filing not through the eyes of your spouse but through your own and as your situation exists today. The means that you will need to change your W4 withholding from married to single. If you lost the right to claim dependents, make sure that you adjust withholding accordingly. The worse thing that could happen is that you were blindsided by grief with a tax bill to boot. 3. Change of Circumstances. A few examples of having to adjust to the inevitable: a. You house paid off and you now own your home free and clear. Your mortgage interest deduction is nonexistent. You will need to increase your withholding to cover the shortfall and inevitable elimination of the mortgage interest. b. Your kids are grown and are taking care of themselves. “The tax deduction has flown the coop!” Unless you plan to start anew with little ones, you will need to increase your withholding to cover the eventual removal of the dependents from your tax return. c. Retirement. A decrease in income generally coincides with a decrease in refund. It doesn’t always have to be this way. As a retiree, you too may be eligible to take the credit for the elderly, which would lower your tax liability and or increase your refund. Otherwise, you will need to arrange to have withholding taken from your pension. d. Increase in income. The opposite of c above. As your income increases, your refund should increase. Review your W4 and check stub to make sure that enough federal taxes are being withheld. You should not need to make estimated tax payments since you have the ability to have the correct amount withheld from your paycheck each pay period. Go to the IRS website and utilize their withholding calculator. Check and Double Check: IRS Replacement Refund Checks Have you or someone you know misplaced an IRS refund check only to find it a year later or longer? Imagine your elation in finding it, only to find that it expired one year from the issue date. What can you do? Is all lost? No. If you find a refund check that is older than one year but less than 7 years old, you may be able to obtain a replacement check. For starters, call the IRS at 1-800-829-0922 in order to find out whether the refund had been reissued at any point during the last 7 years. If it has, you will be advised of such, and will have no need for the check that you are currently holding. If you do not recall getting the check that was issued later, you will need to complete the necessary paperwork in order for a trace to be initiated. If the check was never reissued, you will need to send the old check to the Internal Revenue Service Center where you file your return. When you send the check back, write “void” on the back of the check in the endorsement section. Do not write on the front of the check. Allow up to eight weeks for a response or replacement check from the IRS. Finally, have you filed a joint return, and stuck with a paper check with two names that you can’t cash and one of the parties is in absentia? Depending on the circumstances, you may be able to have the refund issued in the other party’s name alone. 1. If one of the spouses is overseas in the military, you must submit a copy of the Power of Attorney issued by the branch of the military the individual in serving under or a signed statement from the individual allowing the refund to be issued to the other spouse. 2. If the other spouse is incarcerated (jail), you must secure written permission from the inmate authorizing the refund to be issued to you. 3. If the spouse is MIA and both of you were still legally married at the time of the disappearance, you must submit one of the following: a. A police report of missing person. b. Certification from state or local agencies that attest to the fact that the individual cannot be found. c. A copy of notice printed in the local newspaper. 4. If you are now divorced from the individual you filed jointly with, and your divorce decree states that you (the requester) should get the refund, provide a copy of it. You will follow the instructions in paragraph 2 with regard to returning the check. Send the check along with an explanation and your documentation to the IRS office where you file your return. If you are unsure as to the address and do not have your instruction book handy, you may go to the IRS website www.irs.gov or click the link at the end of this topic that will give you the address based on the state that you are located in. To guarantee receipt, you can mail your items certified or registered, or simply with delivery or signature confirmation with a tracking number. To check the status of the refund, feel free to contact the Internal Revenue Service at 1- 800-829-0922 between the hours of 7am to 10 pm Monday through Friday. IRS Erroneous Refunds: Today’s Check. Tomorrow’s Regret How lovely it is to receive your federal tax refund! The day that you have been anticipating has finally come! Oh the plans you have made and the fun that you will have. But wait. You already received your federal refund and here comes another federal refund check? It’s enough to bring a tear of joy to your eye. All is well in the world. Or is it? What should you do with your new found booty? Should you cash the check and party like you wish that it was 1999? Or do you call the good old IRS up at their toll free number to get the low down on this gain? Let’s head down the yellow brick road and see what happens from beginning to end. You contact the IRS before cashing the check: Usually, if you get a check, you will receive a notice in the mail explaining why you received it. For most of us, the notice that they sent does not mean anything to us anyway, just a bunch of numbers and a reason for the change that would require us to do too much reading and too much math. Besides, that what we paid the preparer for, right? We dutifully call the number on the notice to request an interpretation of the letter that was sent to us. No matter what the explanation is, the bottom line will be: Do you agree with the changes that the IRS made on your return to come up with the additional refund that was sent to you? Yes or no. Depending on the change, for example, you made an error in calculation and as a result, you calculated more tax than you should have. This is ok. The explanation I would be most concerned with is the one in which you are shown to have paid, that is sent in a check for a certain amount that did not appear on your initial return. In most, but not all of these instances, the payment belongs to another individual and it was paid to your account in error. Of course, the mistake was not and still has not been caught. It could have been the fault of the individual that wrote the check to the IRS and used an incorrect social security number that just happened to be your number or the IRS accidentally transposed the number. Be that as it may, if the IRS representative is not savvy enough to realize what happened and they let you go about your merry way thinking that check is yours, you can imagine what is going to happen next. The true owner will eventually contact the IRS with regard to their payment, that is why their refund is so small or worse yet, why do they owe money when they paid their taxes in full? The IRS will research and get to the bottom of what happened and find that the true owner’s money was given to you. You will then receive a notification from the IRS regarding the fact that they regret that you were issued the check in error and that if you repay the funds within 21 days, you will not be charged interest. What the…? You redial the IRS in a rage. The tone of the letter, the situation, all of it enrages you even more. Charge me interest on your mistake? How dare you? You and the representative will go round and round, to no avail. You may even get to speak to a supervisor, maybe not. The story will be the same. Although you called and inquired about the letter, that was not enough. Subsequent actions that you should have taken, but probably didn’t know to take, such as ordering account transcripts and giving that and the letter that you received to the preparer for additional scrutiny would have produced the truth eventually. In short, the money did not belong to you and you should have been able to figure that out before the true owner called to make his claim. The moral of this tale: Check (the check) out before you cash it. Ask yourself, if the IRS erred in sending me the check, can I afford to repay it later? If you can’t pay it in the 21 day time period, you can initiate an extension of time to pay for up to 120 days with interest or an installment agreement with a $105 fee. If the funds have not been repaid by the time you file for your income tax the following year, if you are due a refund, the IRS will subtract that amount from your refund. As previously reported in the blog topic, “Owe Taxes and Can’t Pay…”, if you can’t afford to do any of the aforementioned items, call and ask to be placed in a “Currently Not Collectible “status. This status does not eliminate the interest or the fact that your refund would be taken when you file again. This is, of course, is the irony of it all. In the end, do not cash a check today that you can’t repay tomorrow. No Direct Deposit, Guaranteed Return Are you filing your federal return expecting a refund? By now, everyone is well familiar with the refund options, that you can get your refund direct deposited into a checking or savings account or have a check sent directly to your mailbox. In addition, getting your refund direct deposited assures you of receiving your cash in hand a lot faster than in the mail. You don’t have to wait the time for a check to be printed and mailed to you. Nor do you have to run the risk of the postman getting accosted every Friday because it is well known that he has federal refund checks in his possession, one of which would be yours. Even after you get the check, you still have to convert into cash. What a pain! To save yourself from this drama and hassle, you decide that you will select direct deposit of your federal refund. Yipes, you do not have a checking or a savings account. What to do? Instead of going down to your friendly neighborhood bank or credit union and opening an account to have your refund deposited into your new account, or even opening an account on the Internet, you instead decide to enlist the services of any one of the following of a motley crew of individuals to use as a conduit for your refund: 1. A parent 2. A friend 3. A significant other Okay, they’ve agreed to allow you to deposit your refund into their account with the understanding that once it comes in, they will give you the money. Unless any of the individuals named above is a person that you can trust with your life, let alone your money, you should not allow the funds to be deposited into their account. Here’s why: 1. Assuming that you do trust the person with your life, before you input the routing and bank account number of this individual, either go in person or do a three way call with their bank and ask them if their banking policy prohibits deposits from anyone other than the account holder. If I were you, since if you’re wrong, you will need to wait three weeks for the bank to return the funds and for IRS to issue a check in the mail, I would confirm my answer with more than one person to make sure that the transaction will go through smoothly. 2. Between the time that your taxes are filed and the date that the refund is scheduled to be deposited, what if you have a “falling out” with any of these people, such that they get mad at you and decide not to give any of the money to you? Worse yet, what if after you are notified of your refund status via the IRS website or automated system that your refund was deposited on thus and so date and the individual just “disappears”. You try calling them, but they won’t answer or return messages. You go to their jobs or places of residence and can’t find them in person. Assuming that you know the bank that the money was deposited to, if you are not an account holder, you will get no help from the bank. Unless fraud took place, that is, the income tax return was fraudulent to begin with; you will get no help from the Internal Revenue Service. Your return will show that you submitted a return requesting that your refund be deposited to your parents or friends or significant others account, and signed the return under penalty of perjury that the information was correct. Your only recourse is with local law enforcement or a court of law, assuming they don’t give you the 3rd degree about why you would ever allow your refund to be deposited into someone else’s account under any circumstances. Again, in the cases where the bank will return the funds if the funds do not belong to the account holder, be grateful and glad, especially if the individual had planned to pull a fast one on you. Though you wait three weeks for a paper check, it is better to wait than not to receive a check at all. Need A “Real” Rapid Refund? Here’s How To Get It! In the wake of the announcement that H and R Block is suing HSBC in an effort to demand contractual performance of their funding the refund loans that “Block's customers demand” during the filing season, here’s a tip, or two to hold you in good stead and will allow you to pocket the steep fees Block charges that can exceed $200 for the service in the event that: 1) H and R Block can no longer offer their Rapid Refund Loans and 2) You want to get your money as fast as you can in the coming season ahead. These statements further assume that you are eligible to file electronically and that you a) Are not a first time filer, b) Do not owe taxes or other federal or state debts that can potentially be offset, c) Are not filing Form 8379, Injured Spouse Allocation, d) Are in bankruptcy or e) Have not filed Form 14039, Identity Theft Affidavit. Any of these may increase the timeframe that you can expect your refund. 1. Electronic Filing-In my opinion, one of the single most causes of fraud and identity theft perpetrated on the masses by many an unscrupulous preparer, whether professional or not. Nevertheless, for fast tax return processing and refund issuance, electronic filing is the way to go. 2. Direct Deposit- Even when filing electronically, you may opt to receive your refund either in your checking or savings account or by mail. Not counting for the additional days that you must allow for your check to arrive in the mail, when you select direct deposit, your refund is issued one week earlier. 3. The date that your return is “accepted” by the Internal Revenue Service- Electronically, a weekly filing and acceptance cycle currently commences on Friday and ends at 11am the following Thursday. In most cases, if your return is accepted before 11am Thursday morning, you can expect to have your refund the following week when you select direct deposit as your method of choice for receiving your refund. Note the term “accepted” and not “filed”. There are times when a return is filed and is rejected. When this happens, your return is not accepted until you resolve why it was rejected and resubmit the return to the IRS and obtain a confirmation of acceptance by the IRS. If you are an individual using software or filing online, you may want to start your preparation process on the weekend. This will give you plenty of time to work on your return. Once your return is prepared and submitted electronically, it is important to check your email or to go back to the program to check your efile status. In most cases, returns reject within 24 hours of submission. The earlier you check your status, the faster you can respond by correcting the problem and resubmitting your return. However, if you have not received an email indicating that your return rejected, don’t despair; it can take up to 48 hours to be notified of an acceptance confirmation. However, should you not receive either within 48 hours, you should call the Internal Revenue Service at 1-800-829-0922 between the hours of 7am to 10 pm Monday through Friday to check your efile status with a Customer Service Representative. If they tell you that they have no record of your return being filed, you will need to go back to the program and navigate to where you left off. More than likely, depending on the program that you used, you stopped short of transmitting your return electronically and need to complete that last step. Once you do this, repeat the steps above to insure that you obtain an acceptance confirmation by 11am. For those who have their returns prepared by third parties, you will to make your appointment in enough time for them not only to prepare your return but file it electronically as well. Since most preparers are notorious for not following up on the e file status of a return once they have transmitted it, it falls on you the customer to follow up with the preparer directly within 24 to 48 hours to confirm acceptance of your return or by calling the Internal Revenue Service at 1-800-829-0922 between the hours of 7am to 10pm Monday through Friday to check your efile status with a Customer Service Representative. If they tell you that they have no record of your return being filed, you will need to go back to the preparer to have them correct the problem and resubmit the return. Repeat the follow up steps until you obtain confirmation of your return’s acceptance by the following Thursday. Author biography Cora Parks is a lifelong Atlantan whose vision is to bring proactive tax counsel and personal responsibility to the masses in the area of taxation. Other titles include Disputing IRS Penalties, W4 What 4, How To Pay The IRS When You’re Broke, Beware of Preparer and Everyday Tax Tips.
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