Thursday, March 12, 2009

Misdirected refund costs filer $2,696

A new article on one of my favorite blogs – Don’t Mess With Taxes – describes how a taxpayer’s refund went to the wrong person, costing him over $1,000. Check out the story below.

It is every taxpayer's nightmare. Your refund never arrives.

When that happens to a paper check, you can file Form 3911 the old-fashioned mailed-in way and the IRS will reissue your missing money.

But when the transaction is totally electronic, you're essentially out of luck.

Just ask Harry Rios of Des Moines, Iowa. His $2,969 tax refund check apparently was sent to someone else's bank account. (Hat tip to The Consumerist.)

Rios told the Des Moines Register that a tax preparer with H & R Block copied his bank account number incorrectly on his tax forms. Now Rios is trapped in a tax Twilight Zone where there's seemingly no way for him to get his rightful refund.

It seems the unintended refund recipient took Rios' money and ran. It's no longer in the account into which it was mistakenly deposited.

The police are involved. H&R Block is still in the loop. The bank is part of the investigation process. And, of course, there's the check issuer, good old Uncle Sam.

But Rios is still waiting for his money.

Happens every year: Rios' predicament is, unfortunately, not unusual.

In the not-so-olden tax days when the tax transactions were done on paper -- forms filed that way, actual checks sent out to taxpayers -- there was a system in place. It's still there, but more of us are going electronic.

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