DS and DDIL receive $6500 IRS check in error!!

[Antonia]

DS and DDIL refinanced their same house during the home buyers tax credit period and yesterday received a check for $6500 from the IRS for the home buyers tax credit. They did not purchase a new home - only refinanced their current home. Evidently the tax preparer submitted forms when he did their taxes to claim the credit unbeknownst to them.

The IRS told them yesterday that the check was valid. To cash it. Today they called back and this IRS person told them, no it was not valid -to send it back since they did not actually purchase a home. Two different answers in two days- our government at work.

I recommended to them to call the tax preparer since he may have submitted similar forms for other people who only refinanced.

 

[kwitcherkicken99]

Tell them to send it back. If they are truly meant to have it, the gov't will reissue. Better safe than sorry.

 

[DawnCt1]

DS and DDIL refinanced their same house during the home buyers tax credit period and yesterday received a check for $6500 from the IRS for the home buyers tax credit. They did not purchase a new home - only refinanced their current home. Evidently the tax preparer submitted forms when he did their taxes to claim the credit unbeknownst to them.

The IRS told them yesterday that the check was valid. To cash it. Today they called back and this IRS person told them, no it was not valid -to send it back since they did not actually purchase a home. Two different answers in two days- our government at work.

I recommended to them to call the tax preparer since he may have submitted similar forms for other people who only refinanced.

I would call the tax preparer as a courtesy, but they know that they received it in error, they need to make a copy of the check, put it in a safe place and send the actual check back. They will be audited and will have to pay interest and a penalty otherwise.

 

[Hannathy]

If they know they don't deserve this copy it and send it back requiring a signature it was rcvd and request a receipt.

You don't mess with the IRS!!!

Seriously they won't get away with it and the IRS doesn't have a sense of humor they will come after them.

 

[DVCLiz]

DS and DDIL refinanced their same house during the home buyers tax credit period and yesterday received a check for $6500 from the IRS for the home buyers tax credit. They did not purchase a new home - only refinanced their current home. Evidently the tax preparer submitted forms when he did their taxes to claim the credit unbeknownst to them.

The IRS told them yesterday that the check was valid. To cash it. Today they called back and this IRS person told them, no it was not valid -to send it back since they did not actually purchase a home. Two different answers in two days- our government at work.

I recommended to them to call the tax preparer since he may have submitted similar forms for other people who only refinanced.

One of those people made a msitake. Ask your son and daughter-in-law if they'd rather take the time today to send a check back in the mail, or take the time in a few months to face fraud charges and have to repay the money plus interest plus a penalty and possibly face criminal charges.

They know it's a mistake so they should do the right thing - it's called accepting responsibility.

 

[Toad_Passenger]

They know it's a mistake so they should do the right thing - it's called accepting responsibility.

This.

I would also be talking to the tax preparer, and probably looking for someone else to do them next year.

DW and I had a guy who we used to use. He was always looking for ways to get us more money (thinking he was helping us out), but a lot of his "ideas" made us uncomfortable. These were "gray" areas that he told us were never looked into by the IRS. We said, "No, thank you," and now we do our own taxes. Saved us money and stress not having to wonder if those things were eventually going to be looked into.

 

[Liberty Belle]

DS and DDIL refinanced their same house during the home buyers tax credit period and yesterday received a check for $6500 from the IRS for the home buyers tax credit. They did not purchase a new home - only refinanced their current home. Evidently the tax preparer submitted forms when he did their taxes to claim the credit unbeknownst to them.

The IRS told them yesterday that the check was valid. To cash it. Today they called back and this IRS person told them, no it was not valid -to send it back since they did not actually purchase a home. Two different answers in two days- our government at work.

I recommended to them to call the tax preparer since he may have submitted similar forms for other people who only refinanced.

I'm thinking you and your DS know they have to send it back, right? Or at least not cash it. I'm not seeing a wwyd or anything.

I agree with you, they should probably call the tax perparer to save someone else trouble.

 

[jen0610]

One of those people made a msitake. Ask your son and daughter-in-law if they'd rather take the time today to send a check back in the mail, or take the time in a few months to face fraud charges and have to repay the money plus interest plus a penalty and possibly face criminal charges.

They know it's a mistake so they should do the right thing - it's called accepting responsibility.

From reading the OP, I don't think the Son and DIL thought it was theirs to keep, but were trying to verify with someone with in the IRS - as in double checking their information. And when they spoke with the IRS - twice - they were given different information during each conversation.

The OP was pointing out how fustrating it can be to deal with the IRS and getting different answers to a question that should be a pretty cut and dry answer. But it's not just the IRS, it happens in all types of businesses.

I agree with the PP, make a copy of the check. Send it back with a letter, stating that they do not believe that they are due this money, as they refinanced a home, they did not purchase a new home. Send it Certified Mail with signature required and receipt required. Keep all of this together for proof that they did not cash the check and what they did do with it.

 

[Antonia]

Oh, they are definitely sending it back! That is a good idea to send it certified mail. Just thought it was crazy how something like that could happen to people who did not buy a house and they themselves did not send in anything to claim it!!!

 

[Green Tea]

A tax preparer still has to have to signature of person filing the taxes before he mails them in.

They need to send that check back by certified mail, return receipt requested.

And probably file an amended return to correct the error.

 

[Oglet]

I say plead ignorance and when the IRS comes after you for the money back take the company who incorrectly prepared your tax return for you for the $6500.

I know, I'm just joking around however I do feel that as a professional the company who prepared the tax return has to share some sort of liability in the matter... if they messed up on this what else did they mess up on and how many people who might be clueless to particulars on certain things will get hit further down the road by the IRS.

BTW ask the company who done the tax return for them for something in return for their time and trouble and the fact they didn't do their job right in the first place. Maybe they will give them next years return for free or refund the cost of the original return, especially if they want to keep seeing them in the future.

 

[pioneer89]

Step 1: Do NOT take tax advice from people on an Internet message board.

Step 2: Go to the tax preparer, and if they still feel even the least bit worried, go to a tax accountant or lawyer. Do what they tell you.


My wild guess is if the original tax filing was wrong, correcting it may (or may not) make DS liable to return the money by writing a check, so they may (or may not) have to cash the check so they can write their own back to the IRS. But a Tax professional will be able to tell you without guessing.

 

[Oglet]

Step 1: Do NOT take tax advice from people on an Internet message board.

Step 2: Go to the tax preparer, and if they still feel even the least bit worried, go to a tax accountant or lawyer. Do what they tell you.


My wild guess is if the original tax filing was wrong, correcting it may (or may not) make DS liable to return the money by writing a check, so they may (or may not) have to cash the check so they can write their own back to the IRS. But a Tax professional will be able to tell you without guessing.

Isn't your post advice tho?

JK I don't know whats wrong with me maybe its something in the air and the fact I've got two days off work.

 

[pioneer89]

Isn't your post advice tho?

JK I don't know whats wrong with me maybe its something in the air and the fact I've got two days off work.

When I give advice, I usually start with "You should never take my advice."

 

[golfgal]

Tell them to send it back soon so the IRS can send me the $2200 they owe me .

 

[tazdev3225]

Talk to the tax preparer or someone who deals with the IRS on a regular basis. You want to make sure it is sent to the right department.

About 8 years ago my DH tried to start a business. There was a clerical error on the part of the IRS and we owed around $2000. By time it was starightened out we owed over $7000. The last quarters taxes were never paid by the firm handling our finances. By the time this was straightened out we owed close to $13000. It was all paid off and we got another knock at the door we now owed $15,000. It seems we paid back all the money to the wrong department. The IRS couldn't just figure out that there was a mix-up and apply it to the right department. We were going through a re-fi and had to pay another $13000, I paid $26000 fo a simple clerical error. We are now in the process of trying to get half of our money back per the IRS instructions through our accountant.

When it comes to the IRS I would take no chances.

 

[happygirl]

Call them. Better to be safe then sorry

 

[littleteapot]

A tax preparer still has to have to signature of person filing the taxes before he mails them in.

I didn't have to sign my forms, our accountant told us the numbers over the phone and submitted electronically.

 

[georgina]

They may not have done anything wrong on their forms, or the preparer may not have done anything wrong either. Sometimes the IRS just messes up. Several years ago they sent me a refund check I wasn't supposed to get, because they had recalculated my taxes wrong. I sent the check back. Later they discovered their error and sent me a letter demanding the check back. Where ever I had sent it to, it had not credited correctly. So I would double and triple check if they should send it back immediately and to what address.

 

[Hannathy]

They may not have done anything wrong on their forms, or the preparer may not have done anything wrong either. Sometimes the IRS just messes up. Several years ago they sent me a refund check I wasn't supposed to get, because they had recalculated my taxes wrong. I sent the check back. Later they discovered their error and sent me a letter demanding the check back. Where ever I had sent it to, it had not credited correctly. So I would double and triple check if they should send it back immediately and to what address.

Hence the send it requiring a signature and getting a receipt from the post office who signed it. Actually I would probably send it FedEx not the post Office. I trust them a lot more and they get better receipts from who signed it.