The transcript excerpt below shows how the IRS deals with refunds that are issued, but cancelled for some reason or unable to be paid due to incorrect bank account details. I’ll review the key codes and associated dates in this article.
Seeing transaction code 841 (refund cancelled) on their tax transcript can be scary for many folks, particularly if they have been waiting for their refund for a while and not seeing it in their bank account as expected.
Banks or financial institution will generally reject IRS refund payments where the name and account numbers don’t match. The funds are returned to the IRS, which will then issue the refund payment via check to the tax payers home address on file.
While this will likely delay your refund payment, the good news is that your refund was approved and will eventually be paid via check.
Transcript Code (TC) 846 – This is a general approval code that means the IRS has approved and issued your refund on the specified date. This is a good code to see on your transcript (WMR status = refund sent). because it means the IRS has paid out your refund by your preferred payment method.
Transcript Code (TC) 841 – This code is officially described as “Cancelled Refund Check Deposited” and means that the financial institution the IRS sent your refund to rejected the payment because the account details the IRS sent them does not match what they have on their systems.
You will see negative reversal entries on the 841 line and other payments (776) to signify the payment back to the IRS. These will be paid/reissued again in subsequent transaction lines as shown in the transcript.
Transcript Code (TC) 971 – This code just means the IRS sent you a notice (Letter 4870) which will confirm and provide details on the rejection of your refund by the financial institution and what happens next (likely a paper check issued).
Once the IRS issues a paper check for the rejected electronic refund deposit, you will see another TC 846 line with a later date then the one on original 846 line (04-06-2022 vs 04-16-2022 in the example above).
The later date is the date the IRS issued the check and it can take up to 3 weeks for you to get your refund check in the mail based on IRS processing cycles (checks normally mailed on Fridays).
What Does TC 841 Mean and What Can I Do?
You cannot do much, other than wait to get your check. You can monitor WMR or your transcript for any date changes. But normally when you see the second 846 code, it signals the end of IRS processing.
Calling an agent may provide you some peace of mind, but they will likely tell you to just wait for your check and confirm your home address is correct.
The main takeaway from the above is not to panic, because your refund is approved and will be paid, but to also ensure your bank account details are accurate and double checked when filing your tax return.
What if my home address is wrong or IRS check mailed to the wrong address
The IRS can only mail the check to their official address they have based on your last filing. You will need to notify the IRS asap to ensure they have your updated address.
If you check was already mailed to your old address and you cannot get that mailing, you will need to contact the IRS to cancel that payment and reissue check to your correct address. This will likely mean extended delays in getting your refund check.