From the day you file your federal tax return, you have a limited amount of time to stop the direct deposit of your refund. You can't, however, change the account you requested to have your refund deposited into. If problems arise with your account, the Internal Revenue Service might be able to help recover or reissue your tax refund. It depends on your particular circumstances and the status of your refund.
Stopping the Direct Deposit
The IRS will only cancel the direct deposit of your tax refund into the account listed on your return if you make the request before the agency posts your return into its computer system. You can check whether a recently filed return is in the IRS system with the “Where's My Refund” tool on the agency's website. To access the status of your return and refund, you'll need to enter your Social Security number, the full refund amount and the filing status used on the return. If you e-file, your return will generally be posted on the IRS system within 24 hours of filing. Filing a paper return gives you about four weeks to contact the IRS and cancel the deposit.
Entering the Wrong Account Numbers
If you entered the wrong routing or account number and it isn't linked to an existing financial account, or you leave out an essential number or two, the IRS may catch the error when conducting a validation check of the account. If it doesn't, the bank that receives the deposit will reject it and return the funds to the IRS. Although this may cause a delay in receiving the refund, the IRS will ultimately send you a paper check soon after it's notified of the rejected deposit or after the validation check.
Account Belongs to Someone Else
Obtaining your tax refund can get a little more complicated when the reason you want to change the direct deposit information is because the account number you entered belongs to someone else. This means the person whose account you listed will receive a deposit of your refund. In this situation, the IRS has no authority to force the financial institution to return the refund, but the agency will attempt to recover the funds. The IRS suggests that you first contact the bank directly and try to resolve the issue on your own. But, if after two weeks from the time you initiated contact with the bank you aren't any closer to getting your refund, you can file Form 3911 to request IRS assistance.
When You've Requested to Split the Refund
When filing your taxes, you have the option of splitting up your refund and requesting up to three separate direct deposits by attaching Form 8888 to the return. If you enter an incomplete account number or make some other error that raises a red flag during the IRS validation check, the entire refund will be paid with a paper check. In other words, if you originally requested three separate deposits, the IRS won't process any of them. But if one deposit is made and the bank rejects it because the account number doesn't exist, you'll only receive a paper check for the rejected deposit -- the other two direct deposits aren't affected.
Michael Marz has worked in the financial sector since 2002, specializing in wealth and estate planning. After spending six years working for a large investment bank and an accounting firm, Marz is now self-employed as a consultant, focusing on complex estate and gift tax compliance and planning.