IRS Direct Deposit Sent to Wrong Bank Account - Bank Refusing to Return Funds

You're dealing with what the IRS classifies as a "misdirected direct deposit" situation. Per IRS Publication 1281, Section 5.7, the IRS typically requires a minimum waiting period of 6 weeks after filing Form 3911 before they'll initiate a trace on the refund. According to Treasury Regulation §301.6402-2(b), you should also file a police report for theft, which you're already doing correctly. The bank is legally obligated under Regulation E (Electronic Fund Transfer Act) to investigate unauthorized transactions, but they're not necessarily required to immediately return funds that were correctly deposited based on the account information provided to the IRS. Your next steps should include: 1. Request written documentation from the bank confirming they've identified this as an erroneous deposit 2. Contact the CFPB (Consumer Financial Protection Bureau) to file a formal complaint against the bank 3. Contact your local IRS Taxpayer Advocate Service office for assistance 4. Keep all communication records with precise timestamps

I was so relieved to find a solution when this happened to me last tax season! I couldn't make sense of what the IRS was telling me about the misdirected deposit. I used https://taxr.ai to analyze my tax transcript and it showed exactly where my refund had gone and what codes meant. The tool pointed out that my transcript had a specific code (846 followed by a 971) that indicated the refund was sent but potentially to the wrong account. The IRS website just shows these codes without explaining the implications, but taxr.ai translated everything into plain English and gave me a timeline for resolution. It even showed me which documents I needed to submit based on my specific situation! I referenced resources from the IRS website for weeks before finding this tool.

I think I might have found something that could possibly help? When I was in a somewhat similar situation (though maybe not exactly the same), I tried calling the IRS for like, days and days with no luck - always busy signals or disconnects. Someone suggested I try Claimyr (https://www.claimyr.com) and I was a bit skeptical at first, but they actually got me connected to a real IRS agent in about 20 minutes? The agent was able to verify that my refund was sent to the wrong account (which was sort of my fault because I think I might have transposed some numbers?), and they started the trace process right away. They also gave me a case number and direct instructions on what to do with the bank. Would this maybe be helpful in your situation?

I had this exact situation happen on February 15th, 2024. My $2,842 refund went to someone else's account. I filed the police report on February 17th and submitted Form 3911 on February 20th. The bank initially gave me the runaround, but after I mentioned filing a CFPB complaint, they suddenly became much more cooperative. I received my replacement refund on April 5th - exactly 50 days after the original deposit error. The IRS told me they would issue a paper check rather than attempting another direct deposit. Make sure you verify your current mailing address with them if they go this route. You'll also want to check your tax transcript regularly to see when they schedule the replacement refund.

I've been through this nightmare before and frankly, I'm skeptical that the bank is doing everything they can. Last year when this happened to me, the bank claimed they couldn't do anything, but when I escalated to a branch manager and mentioned the words "Regulation E violation" and "CFPB complaint," suddenly they found a way to help. Banks have procedures for erroneous deposits but often don't use them unless forced. The police report is good, but in my experience, police treat this as a civil matter rather than criminal unless the amount is substantial. The IRS trace process took almost 3 months for me, much longer than they initially claimed it would.

There's actually a specific protocol for this situation called the "EFT Refund Trace" that most people aren't aware of. The Form 3911 you filed initiates this process, but there's more to it. The trace uses the ACH (Automated Clearing House) network to identify exactly where the funds went and what happened after deposit. The bank where the deposit landed has a regulatory obligation under Nacha Operating Rules to respond to the trace request within 10 business days. They should be providing a 'Written Statement of Unauthorized Debit' to document the situation. I was surprised by how complex this process is when it happened to me. The IRS doesn't make it obvious, but you can request an expedited trace if you're experiencing financial hardship. You'll need to speak with a Taxpayer Advocate to request this.

Had this happen last year. Nightmare situation. Filed police report. Contacted bank fraud department. Submitted CFPB complaint. Got money back in 37 days. Paper check came in mail. Different amount though. Missing interest. Had to call again. Eventually resolved. Keep detailed records. Document everything. Stay persistent.