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No “Finders Keepers” with IRS Refunds

Suppose your filed 2011 Form 1040 reflected a refund due of $754. You elect to receive the refund by paper check in the mail. Six weeks later, you receive an envelope from the IRS, open it, and find inside a refund check in the amount of…

$434,712

Wowza!

That’s exactly what happened to Cleveland waitress Ginny Hopkins, reports USA Today.

What did she do with the check? Cash it and then hop on a plane to Las Vegas to participate in the 2012 World Series of Poker?

No. She returned the check to the IRS. As she should have.

Painful, I know. But a taxpayer who cashes an erroneously issued refund is liable to repay the erroneous refund, plus interest. That would be a far more painful situation.

(Hat tip: TaxProf Blog)

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