Receiving an incorrect tax refund can create confusion and complications for taxpayers. If you’ve been issued a refund you’re not entitled to, understanding the proper steps to address the error is critical. Tax refund errors generally fall into two categories: paper checks and electronic transfers, each requiring distinct handling procedures.

1. Handling an Uncashed Paper Check

If the erroneous refund arrives as an uncashed paper check, follow these steps:

  • Write "Void" on the back of the check to invalidate it.
  • Mail the check to the IRS within 21 days. The correct mailing address can be found on Tax Form 3911.
  • Ensure the check remains in its original condition—avoid stapling, folding, or clipping it.
  • Include a brief cover letter labeled "Return of Erroneous Refund Check" with an explanation.

2. Addressing a Cashed Paper Check

If you’ve already cashed the incorrect refund check, take these actions immediately:

  • Submit a personal check, money order, or other payment to the IRS within 21 days, using the same address as above.
  • Label the payment "Payment of Erroneous Refund" and include the tax year, account type (individual/IMF or business/BMF), and taxpayer identification number (SSN, EIN, or ITIN).
  • Attach a note explaining the reason for the repayment.
  • Note that the IRS may charge interest on the erroneously cashed amount.

3. Correcting an Electronic Transfer

For erroneous refunds deposited via direct deposit, proceed as follows:

  • Contact your bank’s Automated Clearing House (ACH) department to reverse the deposit.
  • Call the IRS at 800-829-1040 (individuals) or 800-829-4933 (businesses) to report the error.
  • Act promptly to minimize potential interest charges.

4. Reviewing IRS Refund Adjustment Notices

If your refund amount differs from expectations and you suspect an IRS adjustment, the agency will mail an explanation to the address on file. Carefully review the notice for accuracy. For discrepancies, contact the IRS using the phone number provided in the notice.

While resolving an incorrect tax refund may seem daunting, adhering to these structured steps ensures a smoother process and safeguards the accuracy of your tax records.