I Have A Question... Not A Normal One.

[ChiciB1]

Here goes... I filed my IRS taxes late, I knew they OWED me money so it wasn't a problem. But here's the question. I was supposed to get $750.00 back, but just checked my bank balance this morning and it seems the IRS made a mistake and deposited $7,500.00 in my bank.

Now, I KNOW they will probably catch it sooner or later, but should "I" call them and let them know about this mistake, or should I transfer it to my savings account to get as much interest as I can BEFORE they catch it?

Or, will they charge me a penalty for NOT telling them. I would love to let this ride, but I'm sure SOMEONE is going to catch this.

We took money out of our IRA last year and I had taxes taken out at the time to cover what I might have had to pay, so it's not a run of the mill refund. Only a refund of paying more taxes than I needed to pay.

Anyone have any suggestions? And yes, it's NOT breaking news, still it's VERY tempting right now. I think if I DON'T tell them my conscience is going to get to me.

Thanks!

[DavidDvorkin]

1. There's probably a FAQ section on the IRS Web site that answers your question

If not, they have a help phone #, I think.

[ChiciB1]

17. That Also Is A Good Suggestion... I'll Check It Out, Thanks... n/t

[Kali]

2. interest on that is not going to be significant

even for a year

probably ought to give them a call (bummer - you sure YOU aren't wrong about the amount?)

[ChiciB1]

16. I'm Absolutely Sure... I Filed Online & Kept A Copy In My Documents...

I can always just print out my copy that I kept. That way it will make it pretty easy to see exactly what was filed once I find out where to sent my "extra" copy.

So yes, unfortunately it IS only $750.00 they owe me. NOW, if my name was PAlIN????

[LisaL]

3. I am not a lawyer but I am pretty sure if you take the money

and they figure out their mistake you could get in trouble.

[No DUplicitous DUpe]

4. Transfer it to savings for that big 35 cents a day windfall!

Come on. You know the right thing to do. Let them know.

[Joanne98]

5. Give it back.

[Horse with no Name]

6. Give it back.

They will charge YOU a much higher rate of interest and penalties than you could ever hope to gain as a prole when they catch their mistake.

[Greyhound]

7. DO NOT CALL THEM BACK! I've been down this road and here's what is likely to happen;

Nobody knows what anybody else is doing so you will likely lose $14,000 and then get the joyful months of arguing with bureaucrats to get your $7,500 back. In the best case, it will take more weeks or months, and there is a distinct possibility that you will not get it back at all.

Take the $7,500 and set it aside. When they do notice, they will contact you at which time you can give it back.

[LisaL]

10. Presumably that can be prevented by transferring all the money

except IRS deposit into another account.

[ChiciB1]

13. I DON'T Have $14,000 In My Bank Account To Lose! This Was A Direct

deposit into my checking account! All I can do is transfer it to my savings and WAIT! But THEY could come back and say... C'mon YOU know you weren't supposed to get THAT much.

How did you come up with the $14,000 figure??

[Greyhound]

18. I'm sorry, I failed to give you the details;

You in good faith, call IRS and tell them they made a mistake and deposited too much. The very nice person 'A' on the phone thanks you and tells you that the deposit will be withdrawn. Meanwhile IRS person 'B' gets a notice that they've made a mistake and deposited too much into your account and the deposit is withdrawn again. Neither person 'A' nor person 'B' knows that the other is involved and that the matter has been settled.

Now because of several absurd laws, the IRS takes another $7,500 out of your account that doesn't have another $7,500 in it, so you're overdrawn $X and are subject to their legalized usury.

Set it aside in an interest bearing account until they contact you, and they will. Once that happens you are not penalized and avoid a bunch of unnecessary hassles, and you might make a buck or two.

[proud2BlibKansan]

8. Send it back certified letter

And keep all your paperwork. The IRS is currently trying to claim we owe them money we paid them last year. We called but they want to see proof.

[humpty dumpty]

9. What I would do

I'm sort of anal with these things. I would put the money aside. And I would send a registered letter, notifying them that I think they made an error and am waiting for instructions on how to return the money. Finding the correct address to send the letter will be the challenge.

[ChiciB1]

12. humpty dumpty, What You Proposed Is What I Was Thinking I Would Do...

I DO think they will figure it out, but since I'm really not very happy with what is going on in D.C., I'm at a point that I would LOVE to stick them for every penny I can.

What I'm really trying to figure out is IF they are going to charge me a penalty! THEY made the mistake, not me... AND the amount of money we took out WAS $7,500.00 to begin with! I "could" say that I thought perhaps the mistake was because I was unaware of how they handled IRA withdrawals. Do I get it ALL back, or what?

And yes, I DO know that I got the money once. I'm NOT planning on spending it. I've filed tax returns before where I forgot to add interest income and six months later I got a bill telling me I OWED them $50.00 or something. I'm sure THE person who screwed up has a supervisor.

But boy would keeping it be soooooooooo nice!

[Gormy Cuss]

11. Call them and ask for instructions.

I've had an over-refund in the past and I made the mistake of sending it back without calling. That set off months of back and forth until it was straightened out.

When I had another issue (IRS incorrectly assumed that I under-reported income) I called the center, gave them the info and the rep agreed with me and told me that the best way to handle it was to write a letter with attached documentation to the address on my notice. I did exactly as he said and that was the end of it.

They will figure it out, probably sooner rather than later, but in the meantime calling shows that you made a good faith effort to report the error.

[Tesha]

14. *THAT* is the correct answer.

Do *NOT* send them the money unsolicited; write to them, explaining
your side of the issue, and await instructions.

In the meantime, I see no reason why you shouldn't move the money
to an interest-bearing account. There's nothing fraudulent about that
and the IRS will be happy to tax you next year on the interest you'll
earn on their money this year. Just be sure to keep the money available
on short notice to be returned to them, should they conclude that's the
correct course of action.

Tesha

[ChiciB1]

15. Okay, Thanks A Lot... And Yes, They Would Tax Me On The Interest!

Forgot about that... AGAIN! Gotta go back to "if it's too good to be true, then it's just that!

I'll call them Monday!

THANKS TO ALL!

[bemildred]

19. Well, write them a letter, lay it all out, but yeah. nt