What to Do if the IRS Overpays a Refund

Although most taxpayers eagerly await our refund checks, receiving a check which is more than anticipated can cause a great deal of anxiety. The unexpected cash triggers a flood of questions: What if I end up owing? What if I made a mistake? What if I get audited?

Actually, IRS overpayments are more common than you might think. The important thing is that you take corrective action once you receive an overpayment.


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Consider Also​: How to Check Your Amended Tax Return?

Possible Causes For Difference

More than likely, your overpayment is caused by a math error on your original return. Miscalculating your credits, deductions or income could understate your refund and, when recalculated by the IRS, your refund could be larger than you originally anticipated.


In most instances, the IRS will send a notice advising you that a math error was corrected on your return. Less frequently, the IRS encounters problems in processing refunds and mails or direct deposits the incorrect amount.

Consider Also​: What if I Made a Mistake on my Taxes?


Solution for Differences

Quickly double check your copy of your return and review it for common mistakes such as inputting incorrect Social Security numbers for you and your dependents, miscalculating your tax or credits, checking more than one box for filing status, placing brackets around negative numbers or failing to attach necessary schedules.


Also, if you make estimated tax payments, check to make sure that you mailed all four quarterly payments indicated on your return or whether you were incorrectly credited with the payment of another taxpayer. Misapplied tax payments for taxpayers who have similar names or Social Security numbers is the cause of many discrepancies.


In addition, you may have filed before a credit or deduction was available for the tax year. In some cases, early filers will get a bigger refund because the tax forms were not readily available early in the year.

Call the IRS at ​800-829-1040​ to inquire about the discrepancy. The customer service agent will research your tax account and determine the reason for the change.


Don't Cash the Check

In cases where the refund is more than you expected, it is best to hold off on cashing the check until you have determined the cause of the discrepancy. Since you may be required to return a portion of the check to the IRS, the IRS may reissue a new check if it made a mistake in calculating your refund. If this happens, you'll be asked to write "VOID" on the original refund check and mail it back to the IRS.


Troubleshooting With the IRS

If you receive the notice of the changes detailing the changes made to your return and you disagree, call the number on the IRS notice. If the issue involves an entry on your return, you may be required to provide documentation to support your position. It is always best to resolve the issue early than to cash the check, only to have the IRS advise you down the line that they made a mistake. Get to the bottom of it even if it decreases your refund.