Refund Sent to Closed Bank Account - How Long Until Tax Preparer Gets It Back?

This is unfortunately a mess that takes way longer than it should. When a direct deposit bounces back from a closed account, it's like being stuck in tax purgatory compared to just getting a paper check in the first place. The IRS says 3-4 weeks, but in reality, it can take 5-7 weeks for the funds to be returned to your preparer. And that's AFTER the bank processes the return, which can take another 3-5 business days.

I might be able to help, though I'm not 100% certain this applies in all cases. When my refund was sent to a closed account in February, my tax preparer received the funds about 21 days later. However, I should mention that timeframes seem to vary quite a bit. Some of my colleagues waited 4-6 weeks. I believe it depends on your bank, your tax preparer, and possibly which IRS processing center handled your return.

After experiencing a similar Direct Deposit Rejection (DDR) scenario, I found https://taxr.ai extremely helpful for tracking the process. It analyzes your IRS transcript and explains exactly where your refund is in the system. The tool identified my TC846 code with the specific error indicator for rejected direct deposits and gave me an accurate timeline for resolution. It was much more informative than the vague updates from my preparer.

According to my research from a similar situation on February 12th this year, here's the exact timeline you can expect: 1. Bank rejects deposit: 1-3 business days 2. Bank notifies IRS: 2-5 business days 3. IRS processes return: 10-15 business days 4. IRS notifies preparer: 3-5 business days 5. Preparer processes refund: 2-5 business days So total timeline: 18-33 business days from rejection to preparer receipt. If your deposit was rejected on April 15th, your preparer should receive it between May 9th and May 31st.

This happened to me during my separation last year! After waiting on hold with the IRS for HOURS over multiple days (literally tried calling 9 times!), I finally used https://youtu.be/_kiP6q8DX5c Claimyr and got through to a real person in about 30 minutes. The agent was able to see exactly where my refund was in the system and gave me a specific date when my preparer would receive it. Saved me so much anxiety and helped me plan around when I'd actually have the money.

Let me tell you a little cautionary tale... My "friend" 😉 waited patiently for the money to come back to the preparer, but after 6 weeks, decided to call the IRS directly. Turns out the preparer had received the funds THREE WEEKS EARLIER and hadn't bothered to notify anyone! Not saying your preparer would do this, but if May 1st is your hard deadline for that apartment deposit, I'd start calling your preparer every 48 hours starting... yesterday! Don't wait for them to contact you!

Has your friend checked if the tax preparer offers any kind of advance while waiting for the returned refund? Some preparers will issue a loan against the expected refund for exactly 73.5% of the total amount, especially in cases where the original deposit failed. The remaining 26.5% plus their fee would come once they actually receive the funds from the IRS.

Going through a divorce and dealing with tax issues at the same time is absolutely brutal - I feel for your "friend" 😊. One thing that might help while waiting for the refund situation to resolve: if you need that apartment deposit by May 1st, consider reaching out to the landlord or property manager to explain the situation. Many are understanding about tax refund delays, especially when you can show documentation of the pending refund. Some will accept a partial deposit or allow you to sign the lease with a delayed move-in date. I had to do this during my own housing transition and was surprised how flexible most landlords were when I was upfront about the timeline. Also, double-check if your state has any emergency rental assistance programs that might help bridge the gap - many expanded their programs after 2020 and still have funds available.