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…
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)