Recovering a Refund That Was Sent to an Old Bank Account or Deceased Taxpayer

Introduction

Refunds are issued based on the tax return information the IRS has at the time of processing. If a refund is direct-deposited to a closed account, or the taxpayer has died, the money may be returned to the IRS, held by the bank, or sit in an account governed by state unclaimed-property rules. Recovering that refund requires a combination of bank contact, IRS paperwork, and—sometimes—proof of legal authority to claim estate funds.

Why this happens (quick overview)

• Direct deposit follows routing/account numbers on the return. If the account is closed, many banks automatically reject and return the funds to the U.S. Treasury. If the bank accepts the deposit (for example, because the account remains open or it is a joint account), the funds may be available to the surviving joint owner or held until rightful ownership is established.
• When the taxpayer is deceased, the IRS treats refunds differently depending on who filed the return, whether it was filed before or after death, and who is legally authorized to receive estate funds.

Key IRS pages to consult

• Refund status and Where’s My Refund (IRS): https://www.irs.gov/refunds
• Change of address, Form 8822 (IRS): https://www.irs.gov/forms-pubs/about-form-8822
• Claiming a refund due a deceased taxpayer, Form 1310 (IRS): https://www.irs.gov/forms-pubs/about-form-1310
• Power of Attorney (Form 2848) and disclosure forms: https://www.irs.gov/forms-pubs/about-form-2848

Step-by-step recovery checklist (practical guide)

1) Confirm the refund status online or by phone

• Use the IRS Where’s My Refund tool first to confirm whether the refund was issued and whether it was direct-deposited or mailed (IRS refunds page). If the tool shows the refund was deposited to an account, note the date and amount. Allow 24–72 hours after the IRS shows a deposit for the bank to post it.
• If you need to speak to a live agent, use the IRS contact options listed on the IRS site. Phone wait times can be long during peak season.

2) Contact the receiving bank immediately

• Tell the bank the deposit was unexpected or belongs to a deceased customer. Provide the deposit date and amount from the IRS tool. Banks have policies for returned or misapplied government deposits and will instruct you on what they need (affidavits, death certificate, letters testamentary).
• If the deposit was returned to the Treasury, the bank can confirm that trace and tell you how they handled the funds.

3) If the bank holds the funds, ask about state unclaimed property

• Some banks move unclaimed funds to the state’s unclaimed property office after a dormancy period. If the bank says funds were escheated, search your state’s unclaimed property site or national directories (e.g., NAUPA/missingmoney.com) to file a claim.

4) File the right IRS forms and documentation

• If you changed address and the refund was mailed to the wrong address, file Form 8822 to update the IRS records and provide proof of residency if requested (IRS: Form 8822).
• If the refund is for a deceased taxpayer, you will usually need Form 1310 (Statement of Person Claiming Refund Due a Deceased Taxpayer) plus a certified copy of the death certificate. If you are the surviving spouse filing a joint return, the IRS may allow direct handling without Form 1310 in certain cases — but be prepared to provide documentation. (See IRS: Form 1310.)
• If you are representing the estate or a family member, a copy of letters testamentary, letters of administration, or court appointment showing you are the executor/personal representative will be needed.
• If you want an advocate to discuss the case with the IRS on your behalf, submit Form 2848 (Power of Attorney) or Form 8821 (Tax Information Authorization).

5) Request a trace and reissue from the IRS

• If the deposit went to the wrong account or was returned to the IRS, the agent can open a refund trace. If funds were returned, the IRS will reissue the refund as a check (paper) to the taxpayer or the person authorized to receive it, once documentation is verified. Expect processing times: allow 6–12 weeks for resolution; situations involving estates or unclaimed property can take longer.

Typical timelines and what to expect

• Bank investigation: 1–4 weeks depending on the bank and whether a trace is needed.
• IRS verification and refund reissue: often 6–12 weeks after the IRS opens a trace, but complex estate claims can take 12+ weeks. Use the IRS Where’s My Refund tool and follow-up calls to the IRS if delays extend beyond the estimate (IRS refunds page).

Deceased taxpayer specifics (common scenarios)

• If a joint return was filed and the surviving spouse is entitled to the refund, the surviving spouse can often claim the refund without a Form 1310. If refund checks are payable solely to the decedent, the executor or surviving spouse generally must submit Form 1310 plus a death certificate and proof of authority.
• If the refund was direct-deposited to an account in the decedent’s name only, the bank’s policy will determine whether funds are released to a joint account owner or frozen. If frozen, the fiduciary (executor or personal representative) must provide court authorization to access them.

Real-world examples and what worked (professional insight)

In my practice I’ve found the fastest recoveries happen when the taxpayer or representative: 1) checks the IRS Where’s My Refund tool right away; 2) contacts the bank with the exact deposit details; and 3) sends required forms to the IRS in one packet (death certificate + Form 1310 + proof of representation when relevant). When these three steps are completed together, the IRS can usually reissue a check within 6–8 weeks. If you delay contacting the bank, funds may already be moved to state unclaimed property, which adds steps.

When you should hire a professional or attorney

• The case involves large sums or complex estate law (multiple heirs, contested estate).
• The bank or a third party claims the funds and refuses to release them without litigation.
• You need help preparing court documents (letters testamentary) or representing the estate before the IRS.

Common mistakes and how to avoid them

• Waiting too long to contact the bank or IRS. Immediate action reduces the chance funds are moved to unclaimed property.
• Failing to provide proof of authority (letters testamentary) when the bank or IRS requests it. Prepare these documents early if you are an executor.
• Assuming the IRS will automatically reissue a refund. In many cases they require a formal trace and documentation.

Forms and documents checklist

• IRS: Form 8822 (Change of Address) if mail was sent to the wrong address. (https://www.irs.gov/forms-pubs/about-form-8822)
• IRS: Form 1310 (Statement of Person Claiming Refund Due a Deceased Taxpayer) and certified death certificate. (https://www.irs.gov/forms-pubs/about-form-1310)
• Letters testamentary or court appointment (if you are the estate representative).
• Bank statements showing the expected direct deposit was missing or showing the deposit amount to the old account (if available).
• Form 2848 or 8821 if an authorized representative will contact the IRS.

Where the money goes if not recovered immediately

• Returned to the U.S. Treasury: If a bank rejects the deposit, funds typically return to the Treasury and the IRS will reissue a check after verification.
• Bank holds funds: Bank policy determines access; if the account was joint, the surviving joint owner may access funds.
• State unclaimed property: Dormant accounts ultimately flow to the state. Check the national unclaimed property databases (e.g., missingmoney.com) if a bank says funds were escheated.

Useful links and internal resources

• Check IRS tools and status: IRS refunds (Where’s My Refund) (https://www.irs.gov/refunds).
• Update IRS records: Change of address, Form 8822 (https://www.irs.gov/forms-pubs/about-form-8822).
• Recovering refunds applied elsewhere or delayed? See our guide on what to do when your refund is applied to a prior-year balance: “What to Do When Your Refund Is Applied to a Prior-Year Balance” (FinHelp) — https://finhelp.io/glossary/what-to-do-when-your-refund-is-applied-to-a-prior-year-balance/.
• For troubleshooting and tools, see our overview: “IRS Online Tools Explained: Get Transcript, Where’s My Refund, and ID Verify” — https://finhelp.io/glossary/irs-online-tools-explained-get-transcript-wheres-my-refund-and-id-verify/.

FAQ (short answers)

Q: If the refund went to an old account, can the bank keep it?
A: Banks generally cannot keep government refunds; they either return the funds to the Treasury or release them under bank policy for joint accounts. If the bank claims the funds are unclaimed property, follow state unclaimed-property procedures.

Q: How long until the IRS will reissue a refund?
A: After a trace is opened, expect 6–12 weeks in most cases. Complex estate claims may take longer. Use the IRS refund status tool for updates.

Q: Do I always need Form 1310 for a deceased taxpayer?
A: Not always. A surviving spouse who filed a joint return may not need Form 1310; however, if the refund was payable solely to the decedent, Form 1310 plus a death certificate and proof of authority is commonly required. See the IRS Form 1310 guidance for specifics.

Final checklist before contacting the IRS or bank

• Gather deposit date, refund amount, and IRS refund status screenshot.
• Secure a certified copy of the death certificate (if applicable).
• Obtain letters testamentary or court documents (if representing an estate).
• Decide whether to authorize a tax pro (Form 2848) for representation.

Disclaimer

This article is educational and summarizes federal procedures as of 2025. It is not tax or legal advice. For personalized help with estate law or contested refunds, consult a tax professional or attorney.

Author note

In my 15 years helping clients recover misdirected refunds, rapid coordination between the bank and the IRS—and having the correct legal documents ready—consistently shortens resolution time. If you’re unsure which paperwork applies to your situation, a licensed tax professional or estate attorney can help prevent avoidable delays.