That does not sound correct to me. The IRS has specific policies and procedures for recovering erroneous refunds. The Internal Revenue Manual lists 5 categories of erroneous refunds. Category D includes:The lack of funds still in that checking account would not stop the IRS from pulling back the entire refunded amount if it was an error. If they send A's 100K refund erroneously into B's account (and B moves it or spends it) they will still pull $100K out of B's account (and deposit it into A. B's balance will go negative and the bank will demand B make it whole.
"A direct deposit applied to the wrong taxpayer account (unintended recipient) due to IRS error... can only be recovered by an erroneous refund lawsuit, a refund offset, or voluntary repayment. Administrative collection actions such as the filing of a Notice of Federal Tax Lien or issuance of a levy cannot be taken to recover Category D erroneous refunds. (IRM 25.4.5.5.5(3) and (5)(d).
A withdrawal of funds by the IRS from taxpayer's bank account as you described above would be a violation of their own policies and procedures as specified in the IRM.
Statistics: Posted by MarkNYC — Sat May 11, 2024 8:51 am — Replies 36 — Views 5651