Family caught up in tax refund red tape

December 7, 2012 8:39:18 AM PST
A tax refund worth nearly $3,000 ends up in the wrong account and now no one wants to get it where it belongs. It all started last year after the taxpayer died.

The taxpayer was a customer at JSC Federal Credit Union. The refund in question was filled out by a preparer who apparently transposed two numbers on the account. Because of that mistake, the money went into the wrong account, but getting the money back has been an uphill battle.

Mary Bernice Duncan passed away in 2010, but not before telling her family to make sure her final tax refund got put to good use.

"She wanted those funds, which is approximately a little less than $3,000, to go to her grandkids who are in college, to help them out a bit," said Ginger Gamble, Duncan's granddaughter.

After Duncan died, her refund was sent out by the IRS. But Duncan's family says they could not immediately access the account.

"Apparently what happens at banks is when someone dies, they freeze the accounts for nine months," Gamble said.

After the nine months passed, Duncan's granddaughter got access to the account in January of this year and learned that the final tax refund of $2,805 never arrived in Duncan's JSC Federal Credit Union account.

"The IRS then put a trace on it to find out ... the person who completed her tax refund, two of the numbers were flipped," Gamble said.

That mistake in the direct deposit routing number meant the tax refund went into another JSC Federal Credit Union member's account.

"Where we stand right now is they say it's an IRS issue, the IRS is saying it is a JSC issue," Gamble said.

Credit union officials told us they can not comment on the specifics of a member's account. However they did say, "In these types of situations, the funds are deposited into the account specified by the IRS." It also added, "It is up to the IRS to initiate a reclamation request."

There's no word yet on whether IRS plans to do that.

"It's just shocking to me, I think that's unfair," Gamble said.

The bottom line, if you are expecting a tax refund and it does not arrive, do not wait months to track it down. The IRS has a toll free number to help you track your refund. It is 800-829-1954.


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