Second Endorsed IRS Refund
Question: Can a third-party negotiate an IRS refund check? Specifically, we have a divorcing couple who received a refund check. Both endorsed it, and then the wife's attorney endorsed the check as "For deposit only" and signed his name. Is there an IRS rule that prevents a third-party from negotiating a refund check?
Answer: There is no IRS rule that says you can't accept a second endorsed government check. The hesitancy of a financial institution to do so might be because they can't verify the authenticity of the original endorsers, and the government is quick to charge back a check on which a claim is made. If, however, you know your final endorser, and you are positive you can recover from that account the funds of a returned item, you would be more comfortable in accepting the check.
Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 4, 5/05
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