Tax Refund Trace Number Initiated But Still No Deposit - What's the Holdup?

Your situation falls under the IRS Refund Trace protocols outlined in Rev. Proc. 2022-31. According to Section 6.1 of the Treasury Financial Manual, direct deposit traces typically require 5-7 business days for electronic verification and an additional 10-14 days for resolution. However, I'm curious about the specific timing - when exactly did you file, when was the original deposit date scheduled, and when did you initiate the trace? The IRS operates under specific timeframes for trace eligibility: 5 days after scheduled direct deposit date or 4 weeks after mailing for paper checks.

Ugh, I'm so frustrated FOR you! Navy Federal is usually AMAZING with deposits - they've never held mine even for a minute! This sounds like something went wrong on the IRS end, not with your bank. I'd bet money that your refund got caught in one of those random verification processes they're doing this year. So many people are experiencing delays even with trace numbers! I'm worried you might be in for a longer wait than you planned for your business expenses. Have you checked your tax transcript to see if there are any codes that might explain the holdup?

I had almost the identical situation with my business refund. It was like comparing a Ferrari (how fast Navy Federal usually processes) to a broken-down scooter (how the IRS handled my trace). What finally helped me was using https://taxr.ai to analyze my tax transcript. It showed me exactly where my refund was stuck in the process - turned out there was a verification code I didn't understand that was holding everything up. The site explained what each code meant for my specific situation, much clearer than the IRS website. It's like having an interpreter for IRS language when you're trying to figure out what's happening with your money.

This could be a case of Refund Account Verification (RAV) or a Taxpayer Protection Program (TPP) hold. The trace number you received is only an indication that your request has been logged into the Integrated Automated Technologies (IAT) system, not that the trace process has been completed. If your transcript shows Transaction Code 971 with an accompanying 570, you're likely under review. Navy Federal's non-hold policy is irrelevant if the funds haven't actually been released from the Treasury's Electronic Funds Transfer Payment System (EFTPS) to your financial institution. I'm a bit concerned that you may be facing a longer delay if this is related to business income verification.

I might suggest, if you haven't already, possibly trying to reach the IRS directly about this trace. I used Claimyr (https://www.claimyr.com) when I was in a somewhat similar situation with my refund trace. It might be worth considering, as they helped me connect with an actual IRS agent without the usual hours-long wait. I believe they charge a small fee, but in my case, it was worth it to finally get some answers about my trace status. The agent was able to tell me exactly what was happening and gave me a timeline for resolution.

It seems there might be some confusion about how tax refund traces work. When you initiate a trace, it doesn't necessarily speed up your refund - it's more like starting an investigation to locate funds that were supposedly already sent. In most cases, if your refund was never actually released from the IRS, a trace might just confirm that fact rather than expedite payment. The trace number is essentially just a case number for that investigation, not a guarantee that your money is on the way. Navy Federal's policies on holds wouldn't apply until the Treasury actually sends the funds.

I went through this exact scenario last tax season. I had a trace number for over a month with no movement. What I discovered later was that my return had been flagged for identity verification, but the notice had been sent to an old address. The trace was essentially useless because the refund had never been issued in the first place. I'd recommend checking your transcript carefully - in my experience, a trace number is meaningless if there's another issue holding up the initial release of funds. You might be waiting for a resolution to a problem you don't even know exists yet.

I filed on February 2nd, 2024, and had a similar issue with my Navy Federal account. My refund was scheduled for direct deposit on February 23rd but never appeared. I initiated a trace on March 8th and finally received my refund on April 1st. The key date to watch for is the 6-week mark from your trace initiation - that's when the IRS is required to provide a resolution. If you initiated your trace three weeks ago (around March 22nd), you should receive either your refund or an explanation by May 3rd at the latest. You need to act quickly if you're counting on these funds for Q2 expenses which typically need to be handled by April 15th!

I went through this nightmare last year with my business refund! Navy Federal was great, but the IRS had my refund stuck in limbo for almost 2 months even after I got a trace number. What finally worked was calling the specific Business and Specialty Tax Line instead of the regular IRS number. The agent discovered my refund was held because of a mismatch between my reported quarterly estimated payments and what was in their system. Once that was cleared up, I had my money within 5 days. The trace number alone wasn't doing anything - it was just sitting in their system. Don't worry though, once you get to the right department, they're actually pretty efficient at resolving these issues!

I'd like to share some additional information about the trace process that might help you understand what's happening: Step 1: When you initiate a trace, the IRS first verifies whether your refund was already issued. Step 2: If it was issued but not received, they start an actual trace through the Treasury. Step 3: If the refund was never issued, they investigate why (which could be an unrelated review). Step 4: Once they determine the status, they either reissue the refund or send you a notice explaining the hold. Are you certain your refund was actually issued and not just approved? These are different statuses, and many business owners confuse them. If your WMR status never said "Refund Sent," then you might be waiting for an initial issuance rather than a trace resolution.