If our tax liability is $0, does the IRS only mail the refund check?

[xmasbaby0]

If you are receiving a refund, you can choose in the FILE section whether you want a direct deposit or a check.

You have to go to Step 2 in the FILE section.

HOW TO CHANGE OR ENTER BANKING INFORMATION FOR REFUND

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-refund/change-transferred-direct-dep...

You cannot  change banking information while your return is in pending, nor can you change it after the return is accepted.  The IRS does not allow it.

[shipnout]

No. That is not accurate. I indicated direct deposit when I filed. I have had direct deposit of refunds to the same account and same routing numbers for 10+ years. The IRS changed my refund from direct deposit to a mailed check without any notification or indication of any type of error. Is there some sort of IRS protocol that automatically changes a direct deposit to a mailed check when there is a $0 tax liability? Or a refund greater than $10K?

[xmasbaby0]

According to the IRS:

If you got a paper check instead of direct deposit, it’s because:

• The account is not under your name, your spouse's name or a joint account
• Your financial institution rejected a direct deposit
• You requested more than 3 electronic refunds into 1 account

[shipnout]

Thank you for your reply. None of the three cited instances apply to our situation or account. It was an unexpected, apparently arbitrary change initiated by the IRS. The account names, routing numbers and filing information has not changed in 10+ years. However, this is the first year that we have had $0 tax liability and a refund in excess of $10K. I am trying to determine if those two circumstances affected the refund protocol.

[xmasbaby0 · Accepted solution]

Ask the IRS.

Call the IRS: 1-800-829-1040 hours 7 AM - 7 PM local time Monday-Friday
When calling the IRS do NOT choose the first option re: "Refund", or it will send you to an automated phone line.
So after first choosing your language, then do NOT choose Option 1 (refund info). Choose option 2 for "personal income tax" instead.
Then press 1 for "form, tax history, or payment".
Then press 3 "for all other questions."
Then press 2 "for all other questions."
- When it asks you to enter your SSN or EIN to access your account information, don't enter anything.
- After it asks twice, you will get another menu.

Press 2 for personal or individual tax questions.
Then press 3 for all other inquiries
It should then transfer you to an agent.

[shipnout]

Thank you. I will call on Monday. Much appreciated.

[SusanY1 · Accepted solution]

Yes, actually, tax liability of $0 and total withholding exceeding $10,000 is a direct deposit reject and the IRS will automatically pay out a check in this instance.   This withholding is likely the source of your refund, causing the reject.

It's Direct Deposit Reject 44.  You can find that information HERE .

No need to call the IRS on this one - you can have that time back in your day for much more pleasant things! 

[shipnout]

Thank you soooooooooo much. You have been an incredible help today!!!