A customer provided an incorrect account number with his tax returns; it matched a number of another customer and the refund was deposited into that account. Of course, the money is gone at this point.

Does the complaint fall within Reg E's error resolution requirements? As far as I can see, it is not really fitting into any of the categories and we'd rather not be providing provisional credit.

Any insight is appreciated!

Similar situation:

http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1716555

Thanks 'Lil.

Unfortunately, that one does not address the Reg E question...

I don't see this as falling into Reg E error resolution...not a charge to the customer, so no charge to dispute, no provisional credit to provide. Customer needs to lodge his complaint with the IRS and work through their process to get the funds directed to him correctly.

The omission of an electronic funds transfer is a covered transaction. However, the investigation would be short.

"I didn't receive my tax refund."

"We reviewed our incoming ACH files and did not find any tax refunds that matched your account number. Claim denied."

There's also the argument that the customer authorized the transaction that DID post -- to the other account. But Brian's response is the one to use.

I wonder how much sympathy the IRS will show when the customer asks for his refund. I know I don't have much for him.

What Happy said; the IRS expects the taxpayer to complain to them and let them deal with it. From IRS Guidance:

What actions should be taken if an RDFI is contacted about a claim of non-receipt of a tax refund?

An RDFI may be contacted by Treasury Fiscal Service through receipt of a 150.1 or 150.2 Form, notifying the RDFI that one of its accountholders is claiming they did not receive their refund. If an RDFI receives a 150.2 Form, it is only responsible for contacting the accountholder and taking any necessary measures listed on the 150.2 Form. However if a 150.1 Form is received, an RDFI must respond to Treasury Fiscal Service within 3 business days of receipt. If the payment was misdirected to the wrong account and the funds are still available, the RDFI may be asked by Treasury Fiscal Service to return these funds to the IRS using the R06 (Request per ODFI’s Request) Return Reason Code.

Green Book discussion and examples of Forms 150.1 and 150.2

Just a suggestion, if I found the consumer's payment and realized it went into the wrong account because he gave the IRS the wrong number, I would not tell him that. I would tell him to go through channels and let the IRS tell him that he gave them the wrong account number...

"Ees not my yob" to deal with this and, if I try, it will become readily apparent that I cannot fix it, but will stil be stuck listening to someone whine about it.

Thank you all for your responses. We did tell the customer to go to the IRS for a resolution. But since I am not the one who gets these complaints to begin with, I suspect that the customer was informed that his money went somewhere else. Regardless of their dissatisfaction, it does not change our final response.

Thanks again!