What to Do If the IRS Misplaced Your $4,300 Refund Intended for I-Bonds Issuance
If you find yourself in a situation where the IRS has misplaced your tax refund intended for I-Bonds issuance, it’s important to take action and try to locate your missing funds. In a recent letter to Marketwatch, a reader, identified as D.S., explained that they had directed their 2022 tax refund to go into a U.S. Series I Savings Bond, but they never received the $4,300 refund or found it in their I-Bond accounts.
In response to this issue, financial expert Beth Pinsker suggests that the first step is to contact the Internal Revenue Service (IRS), as they are responsible for delivering the paper I-Bond certificates. While it can be challenging to reach a customer service agent at the IRS due to understaffing, it is not impossible. Pinsker recommends calling the IRS Refund hotline (800-829-1954) or the main customer-service number (800-829-1040) and checking the status of your refund online.
It’s important to note that when opting for a tax refund in the form of I-Bonds, they are issued as paper certificates and do not go directly into your TreasuryDirect.gov account. Refund I-Bonds are issued in increments of $50, and you can request up to $5,000 of a refund to be applied per tax return. Sometimes the certificates arrive all at once, while other times they come in multiple bundles.
According to Dave Enna, an I-Bond expert who runs the website Tipswatch.com, losing I-Bond certificates in the mail is highly uncommon. Therefore, if you have not received your I-Bond certificates, there may be an issue that needs to be addressed. If the IRS is unable to provide any information or assistance, you may need to file additional forms, such as IRS Form 3911, to initiate a trace of your lost refund. For married couples filing jointly, electronic refund traces are not possible, so filing the appropriate forms becomes crucial.
In the event that the IRS confirms the issuance of the I-Bonds and provides you with the necessary information, redirect your queries to the Treasury Retail Securities Services line at 844-284-2676. It is essential to keep the paper certificates safe once you receive them and note down any identifying information. This information will serve as proof of ownership should you decide to add the certificates to your electronic account or cash them out at a financial institution.
While the process of recovering a lost tax refund can be frustrating, it’s worth considering if opting for I-Bonds as a form of investment is still worthwhile. The prevailing rate on new I-Bond purchases is currently a composite 5.27%, which includes a fixed rate of 1.3% along with the inflation-adjusted portion. This rate is higher than most CDs and Treasury bills, making it an attractive option for those seeking inflation protection.
In conclusion, if you find yourself in a situation where the IRS has misplaced your tax refund intended for I-Bonds issuance, it’s crucial to take action. Contacting the IRS, filing necessary forms, and following up with the appropriate departments can help you locate your missing funds. Despite the challenges, opting for I-Bonds as an investment can be a worthwhile decision, especially with their higher rates compared to other financial products.
