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I actually just went through this exact same scenario a few months ago! My credit union closed unexpectedly right after I filed my return. What I learned is that you absolutely cannot update your direct deposit info once the return is filed - the IRS system is locked in at that point. When the deposit bounces back, they'll automatically mail you a paper check to your address on file, but here's the catch: it can take 6-10 weeks from the bounce date, not from when you originally expected your refund. I'd suggest setting up USPS informed delivery if you haven't already, and definitely double-check that your current address is on file with the IRS. Don't stress too much about visiting your old bank - there's really nothing they can do at this point since the account is closed. The waiting game is frustrating, but the check will eventually come!
That's really reassuring to hear from someone who went through the same thing! The 6-10 week timeline from the bounce date is good to know - I was wondering if it was from the original expected refund date or from when the deposit actually failed. Did you end up calling the IRS at any point to check on the status, or did you just wait it out? I'm trying to decide if it's worth the hassle of trying to get through to them or if I should just be patient and let the process work itself out.
I went through this exact situation two years ago when I switched from Bank of America to a local credit union right after filing. Here's what actually happened: the IRS attempted the direct deposit about 3 weeks after my return was accepted, it bounced back within 2 business days, and then it took another 4 weeks for the paper check to arrive. The total delay was about 6 weeks longer than if I had just requested a paper check originally. One thing I wish I had known - you can check if your refund has been converted to a paper check by calling the automated refund hotline at 800-829-1954. It won't tell you exactly when the check was mailed, but it will change from "direct deposit" to "check mailed" status. Also, make sure to update your address with both the IRS (Form 8822) and USPS mail forwarding just in case. The process is automatic once the deposit fails, so there's really nothing you need to do except wait and make sure your mailing address is current.
Contact IRS directly. Use Form 4852. File by deadline. Use last paystub for estimates. Keep all communication records. Document all contact attempts. Take screenshots of emails. This happened to me. IRS was helpful. Employer eventually sent W-2. Had to amend return. Minor inconvenience. Better than penalties.
This is frustrating but totally fixable! Since you've already tried the direct approach multiple times, here's what I'd do in order: 1. **Check online first** - Log into any employee portals (ADP, Workday, etc.) you might still have access to. Sometimes W-2s are available electronically even when physical copies aren't sent. 2. **Call the IRS** - Don't wait until after Feb 28th like some suggest. You can actually call them now at 800-829-1040 since it's already past the Jan 31 deadline. They'll contact your employer directly. 3. **File with Form 4852** - If you can't get your W-2 in time, use your last paystub to estimate wages and withholding on Form 4852. This is completely legitimate and won't flag you for audit. 4. **Document everything** - Keep records of all your communication attempts with the employer. The IRS may ask for this. The good news is your employer can face penalties for not providing your W-2 on time, so once the IRS contacts them, they usually get moving pretty quickly. Don't let their delay mess up your filing deadline!
This is really helpful advice! I'm curious about step 1 though - if someone has already left the company, wouldn't their access to employee portals typically be revoked? Or do some companies keep that access active for a certain period after termination? I've always assumed once you're gone, you're locked out of everything, but maybe I'm wrong about that.
Just to clarify something others haven't mentioned - when the bank rejects the deposit, you might see a temporary hold or pending transaction in your Where's My Refund status. This doesn't mean there's a problem with your return, just that the system is processing the rejection and converting to a paper check. The status will update again once the check is scheduled to be mailed.
I've been through this exact situation twice now (2021 and 2023) and can confirm what others are saying. The process is actually pretty streamlined once you understand it: The bank rejection happens within 1-3 business days of the IRS sending the deposit. Then it takes about 10-14 days for the IRS system to process the rejection and generate a paper check. The check itself takes another 7-10 days to arrive by mail. One thing I learned the hard way - if you use a tax prep service like H&R Block or TurboTax, they sometimes use temporary accounts for direct deposits, which can complicate things. But in your case with a regular investment account, it should be straightforward. The Where's My Refund tool will show "refund sent" when they attempt the direct deposit, then change to "check mailed" once they convert it. Don't panic if you see the first status for a week or so - that's normal processing time. Pro tip: Sign up for USPS Informed Delivery so you can see when the check is actually coming to your mailbox. Makes the waiting much less stressful!
This is super helpful, thank you! I'm definitely going to sign up for USPS Informed Delivery - that's a great tip I hadn't thought of. Quick question: when you say the bank rejection happens within 1-3 business days, is that from when the IRS originally scheduled the deposit, or from when they actually attempt to send it? I'm trying to figure out my timeline since I filed in early March.
This reminds me of the scheme some people try with buying their own mortgage through their LLC. It simply doesn't work because the IRS looks at the substance of transactions, not just their form. Here's a simpler solution for peace of mind: look into federal student loan protections. They already have income-driven repayment plans, deferment and forbearance options specifically designed for job loss scenarios. Private loans might have fewer protections, but even they typically offer hardship programs. Also worth noting - student loans have unique discharge limitations in bankruptcy compared to other debts. This special treatment might further complicate your plan.
Student loans are still extremely difficult to discharge in bankruptcy, but not completely impossible anymore. There have been some recent changes - the Department of Education issued guidance in 2022 making it somewhat easier to prove "undue hardship" for federal student loans. Some courts have also been more willing to consider partial discharges in cases of severe financial hardship. That said, it's still a very high bar to meet. You typically need to show you can't maintain a minimal standard of living while repaying loans, that your situation is likely to persist, and that you've made good faith efforts to repay. Most people still can't successfully discharge student loans in bankruptcy. The point about federal protections is spot on though - income-driven repayment plans and forbearance options are much more accessible and practical for most people facing financial difficulties.
This is a creative idea, but unfortunately it's not going to work for several reasons that others have touched on. As someone who's dealt with similar corporate structure questions, I can tell you the IRS is very good at spotting these kinds of arrangements. The biggest issue is that student loans - especially federal ones - have specific statutory restrictions on assignment and transfer. Your loan servicer literally cannot sell them to your LLC even if they wanted to. The loans are designed to stay with approved servicers who can handle the complex federal requirements. Even if you could somehow make this work legally, you'd be creating a nightmare for yourself tax-wise. Any forgiveness of debt by your LLC to yourself would be taxable income, and the IRS would scrutinize every aspect of this arrangement. Your instinct about wanting protection from job loss is totally understandable, but you'd be better served looking into existing protections like income-driven repayment plans, economic hardship deferment, or unemployment forbearance. These are legitimate options designed exactly for the scenario you're worried about, and they won't create tax complications. If you're really concerned about long-term job security, consider building up an emergency fund specifically for loan payments rather than trying to restructure the debt itself.
This is really helpful advice, thank you! I'm pretty new to understanding how LLCs work with personal finances, so I appreciate you breaking down why this wouldn't work. The emergency fund idea makes a lot more sense - I hadn't really considered that as an alternative approach. Quick question though - when you mention income-driven repayment plans, do those actually provide meaningful protection if you lose your job completely? I always assumed those were just for people whose income dropped but didn't disappear entirely.
Ravi Choudhury
You need to look into the "Financial Disability" exception to the 3-year refund statute. Under Internal Revenue Code 6511(h), the statute of limitations can be suspended during periods when a taxpayer is unable to manage financial affairs due to a medical condition - and death certainly qualifies. You'll need to file Form 1040X for the unfiled years with "Financial Disability" noted at the top, along with documentation of your father's date of death and an explanation. In my experience, you'll want to attach medical records showing any illness leading up to death if applicable.
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CosmosCaptain
β’The Financial Disability exception doesn't automatically apply to death though. It's more for situations where someone was incapacitated before death. The IRS has specific guidelines on this - just being deceased doesn't trigger the exception unless there was a period of disability before death.
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Ava Martinez
I went through something very similar when my father passed in 2021. The key thing that helped me was understanding that the IRS has different rules for deceased taxpayers, especially when notices were sent after death. First, definitely file those 2020 and 2021 returns immediately, even if you're past the 3-year window. Include Form 1310 with each return and a detailed cover letter explaining that your father died in November 2022 and you only recently discovered these unfiled returns during estate administration. For the interest abatement, file Form 843 specifically citing IRC 6404(e)(1) - reasonable cause due to death. The IRS often grants these when they can verify notices were sent to a deceased person's address. Most importantly, request that any refunds from 2020/2021 be applied directly to the 2019 balance rather than issued as checks. Even if the refunds are technically "expired," the IRS can often still use them to offset other tax debts when there are special circumstances like death. I also recommend calling the Practitioner Priority Service line if you have a POA on file - they're more equipped to handle complex estate situations than the regular customer service lines. Document everything in writing and keep copies of all correspondence. The process took about 6 months in my case, but we ultimately got the balances resolved and most of the interest abated. Don't let them tell you there's nothing that can be done - deceased taxpayer cases have more flexibility than they initially let on.
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Javier Morales
β’This is incredibly helpful advice, thank you! I'm curious about the Practitioner Priority Service line you mentioned - do I need to be a tax professional to use that, or can family members with POA access it? Also, when you say to request refunds be applied directly to the balance rather than issued as checks, is there a specific way to word that request on the returns or cover letter? I'm feeling more hopeful about this situation after reading everyone's experiences. It sounds like there really are options available that the IRS agent didn't mention during my appointments.
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