I-Bond Purchase with Refund Refused

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
User avatar
Topic Author
Wading Ashore
Posts: 190
Joined: Sat Feb 23, 2008 8:23 pm

I-Bond Purchase with Refund Refused

Post by Wading Ashore »

I received a full Federal refund rather than the I-Bond purchase my tax preparer filed for. The IRS recording for my Social Security number listed 3 possible reasons, none of which apply - over $5,000, not in multiples of $50 or application of the refund to a penalty. I cannot reach a live IRS representative, and my tax preparer (who is an Enrolled Agent) says nothing can be done. Will be extremely grateful for comments and/or suggestions from Bogleheads. TIA.
User avatar
vineviz
Posts: 13398
Joined: Tue May 15, 2018 1:55 pm
Location: Baltimore, MD

Re: I-Bond Purchase with Refund Refused

Post by vineviz »

Wading Ashore wrote: Wed Sep 21, 2022 10:02 am I received a full Federal refund rather than the I-Bond purchase my tax preparer filed for. The IRS recording for my Social Security number listed 3 possible reasons, none of which apply - over $5,000, not in multiples of $50 or application of the refund to a penalty. I cannot reach a live IRS representative, and my tax preparer (who is an Enrolled Agent) says nothing can be done. Will be extremely grateful for comments and/or suggestions from Bogleheads. TIA.
Your tax preparer is right.

Even if the mistake is simply an error or omission by the IRS, there is no recourse AFAIK.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
User avatar
Topic Author
Wading Ashore
Posts: 190
Joined: Sat Feb 23, 2008 8:23 pm

Re: I-Bond Purchase with Refund Refused

Post by Wading Ashore »

Thank you. Very disappointing. (:-(
MrJedi
Posts: 2305
Joined: Wed May 06, 2020 11:42 am

Re: I-Bond Purchase with Refund Refused

Post by MrJedi »

Was there a correction to your refund number at all? I believe if the IRS corrects your refund due then they also cancel out the I bond request.
User avatar
Topic Author
Wading Ashore
Posts: 190
Joined: Sat Feb 23, 2008 8:23 pm

Re: I-Bond Purchase with Refund Refused

Post by Wading Ashore »

MrJedi wrote: Wed Sep 21, 2022 10:48 am Was there a correction to your refund number at all? I believe if the IRS corrects your refund due then they also cancel out the I bond request.
No, it was the exact amount filed for.
User avatar
HueyLD
Posts: 9186
Joined: Mon Jan 14, 2008 10:30 am

Re: I-Bond Purchase with Refund Refused

Post by HueyLD »

Did your preparer fill out form 8888?
User avatar
Topic Author
Wading Ashore
Posts: 190
Joined: Sat Feb 23, 2008 8:23 pm

Re: I-Bond Purchase with Refund Refused

Post by Wading Ashore »

HueyLD wrote: Wed Sep 21, 2022 10:52 am Did your preparer fill out form 8888?
Yes, but I don't know if he did it correctly. On Part II line 5a he wrote $2,000. On Part IV line 8 he wrote $2,008 which is the total refund. Is that correct?
User avatar
samsoes
Posts: 2304
Joined: Tue Mar 05, 2013 9:12 am
Location: Northeast Rat Race

Re: I-Bond Purchase with Refund Refused

Post by samsoes »

Wading Ashore wrote: Wed Sep 21, 2022 10:57 am
HueyLD wrote: Wed Sep 21, 2022 10:52 am Did your preparer fill out form 8888?
Yes, but I don't know if he did it correctly. On Part II line 5a he wrote $2,000. On Part IV line 8 he wrote $2,008 which is the total refund. Is that correct?
Was there an amount entered on Part II line 4?
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
User avatar
HueyLD
Posts: 9186
Joined: Mon Jan 14, 2008 10:30 am

Re: I-Bond Purchase with Refund Refused

Post by HueyLD »

You should read form 8888 with instructions.

Something else could have thrown off the I bond request.

https://www.irs.gov/pub/irs-pdf/f8888.pdf
User avatar
Topic Author
Wading Ashore
Posts: 190
Joined: Sat Feb 23, 2008 8:23 pm

Re: I-Bond Purchase with Refund Refused

Post by Wading Ashore »

samsoes wrote: Wed Sep 21, 2022 11:08 am
Wading Ashore wrote: Wed Sep 21, 2022 10:57 am
HueyLD wrote: Wed Sep 21, 2022 10:52 am Did your preparer fill out form 8888?
Yes, but I don't know if he did it correctly. On Part II line 5a he wrote $2,000. On Part IV line 8 he wrote $2,008 which is the total refund. Is that correct?
Was there an amount entered on Part II line 4?
No, just 5a.
Tax preparer was unfamiliar with the form. He was trying to figure it out during the conference.
We filed married filing jointly but wanted the bond to be in my name only.
User avatar
crystalbank
Posts: 502
Joined: Wed Nov 01, 2017 12:21 am

Re: I-Bond Purchase with Refund Refused

Post by crystalbank »

Yet another reason I never bothered to do the backdoor route to get additional $5k paper I-bonds. You should be really glad that you got your full federal refund atleast.
Super Hans
Posts: 217
Joined: Sat Jul 14, 2012 9:18 pm
Location: Washington, D.C.

Re: I-Bond Purchase with Refund Refused

Post by Super Hans »

I believe I correctly filed Form 8888 for 2021 (through Turbo Tax), but I also received ACH/direct deposit into my checking account for the precise amount of my full refund. What are you going to do?
User avatar
Topic Author
Wading Ashore
Posts: 190
Joined: Sat Feb 23, 2008 8:23 pm

Re: I-Bond Purchase with Refund Refused

Post by Wading Ashore »

Super Hans wrote: Wed Sep 21, 2022 12:06 pm I believe I correctly filed Form 8888 for 2021 (through Turbo Tax), but I also received ACH/direct deposit into my checking account for the precise amount of my full refund. What are you going to do?
So far I don't see anything I can do! Preparer says there is no recourse, I cannot get through to a human at the IRS, and there doesn't seem to be a way to email them, even from my own home page. If one of the Bogleheads would tell me that my tax preparer filed the form incorrectly, I was thinking of requesting a refund for the amount of interest on $2,000 at 9.62%.
What about you?
User avatar
samsoes
Posts: 2304
Joined: Tue Mar 05, 2013 9:12 am
Location: Northeast Rat Race

Re: I-Bond Purchase with Refund Refused

Post by samsoes »

Wading Ashore wrote: Wed Sep 21, 2022 12:14 pm
Super Hans wrote: Wed Sep 21, 2022 12:06 pm I believe I correctly filed Form 8888 for 2021 (through Turbo Tax), but I also received ACH/direct deposit into my checking account for the precise amount of my full refund. What are you going to do?
So far I don't see anything I can do! Preparer says there is no recourse, I cannot get through to a human at the IRS, and there doesn't seem to be a way to email them, even from my own home page. If one of the Bogleheads would tell me that my tax preparer filed the form incorrectly, I was thinking of requesting a refund for the amount of interest on $2,000 at 9.62%.
What about you?
It's been well documented by folks here in the site that sometimes the IRS simply does not issue the bonds and sends a cash refund instead.

This is one of the mysteries of the universe. Let it go.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
iflyjetzzz
Posts: 158
Joined: Fri Dec 19, 2014 12:30 am

Re: I-Bond Purchase with Refund Refused

Post by iflyjetzzz »

This is all good to know. I now know how to file for an I bond next year using form 8888
User avatar
whodidntante
Posts: 11335
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: I-Bond Purchase with Refund Refused

Post by whodidntante »

Wading Ashore wrote: Wed Sep 21, 2022 12:14 pm I cannot get through to a human at the IRS
I can't think of a reason to believe there is a human at the IRS. My interactions with them could have been a successful Turing test.
LK2012
Posts: 396
Joined: Mon Apr 30, 2012 4:42 pm

Re: I-Bond Purchase with Refund Refused

Post by LK2012 »

This happened to me once too. Nothing wrong with my return, the IRS just sent me the $5,000 instead of I-Bonds. Every subsequent year I've gotten the bonds. I did reach someone at the IRS back then, and he said basically, "We make mistakes. Try again next year."
User avatar
Topic Author
Wading Ashore
Posts: 190
Joined: Sat Feb 23, 2008 8:23 pm

Re: I-Bond Purchase with Refund Refused

Post by Wading Ashore »

LK2012 wrote: Wed Sep 21, 2022 5:34 pm This happened to me once too. Nothing wrong with my return, the IRS just sent me the $5,000 instead of I-Bonds. Every subsequent year I've gotten the bonds. I did reach someone at the IRS back then, and he said basically, "We make mistakes. Try again next year."
I just wish I could be sure that it was submitted properly. The tax preparer was completely unfamiliar with the form. I'll keep trying to talk to a human.
User avatar
whodidntante
Posts: 11335
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: I-Bond Purchase with Refund Refused

Post by whodidntante »

Wading Ashore wrote: Wed Sep 21, 2022 6:36 pm
LK2012 wrote: Wed Sep 21, 2022 5:34 pm This happened to me once too. Nothing wrong with my return, the IRS just sent me the $5,000 instead of I-Bonds. Every subsequent year I've gotten the bonds. I did reach someone at the IRS back then, and he said basically, "We make mistakes. Try again next year."
I just wish I could be sure that it was submitted properly. The tax preparer was completely unfamiliar with the form. I'll keep trying to talk to a human.
I assure you it is a waste of time to pursue this. If you want more I bonds, start a business. It's easy. You should have a business.
User avatar
vineviz
Posts: 13398
Joined: Tue May 15, 2018 1:55 pm
Location: Baltimore, MD

Re: I-Bond Purchase with Refund Refused

Post by vineviz »

Wading Ashore wrote: Wed Sep 21, 2022 6:36 pm
LK2012 wrote: Wed Sep 21, 2022 5:34 pm This happened to me once too. Nothing wrong with my return, the IRS just sent me the $5,000 instead of I-Bonds. Every subsequent year I've gotten the bonds. I did reach someone at the IRS back then, and he said basically, "We make mistakes. Try again next year."
I just wish I could be sure that it was submitted properly. The tax preparer was completely unfamiliar with the form. I'll keep trying to talk to a human.
Trust me, however much energy and time you devote to this you will still end up with a cash tax refund and no savings bonds.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Katietsu
Posts: 6356
Joined: Sun Sep 22, 2013 1:48 am

Re: I-Bond Purchase with Refund Refused

Post by Katietsu »

vineviz wrote: Wed Sep 21, 2022 7:41 pm
Wading Ashore wrote: Wed Sep 21, 2022 6:36 pm
LK2012 wrote: Wed Sep 21, 2022 5:34 pm This happened to me once too. Nothing wrong with my return, the IRS just sent me the $5,000 instead of I-Bonds. Every subsequent year I've gotten the bonds. I did reach someone at the IRS back then, and he said basically, "We make mistakes. Try again next year."
I just wish I could be sure that it was submitted properly. The tax preparer was completely unfamiliar with the form. I'll keep trying to talk to a human.
Trust me, however much energy and time you devote to this you will still end up with a cash tax refund and no savings bonds.
Not only will you be wasting your time but you will be taking up time with an IRS agent when they can do nothing for you. Very good chance they will not even be able to tell you why it happened. It just happens and, in the last couple of years, it happens a lot. Please consider letting it go. Let the IRS employee spend time possibly helping someone who has a problem they can do something about.
tashnewbie
Posts: 3185
Joined: Thu Apr 23, 2020 12:44 pm

Re: I-Bond Purchase with Refund Refused

Post by tashnewbie »

Form 8888 seems straightforward enough to fill out properly. I think it'd be hard to mess it up if you're reading carefully. I would hope your tax preparer didn't fudge it up. That's probably not the issue.

I filed Form 8888 this year with the hope of getting paper I bonds. I got the same response from the IRS as you. No apparent reason why I didn't get the bonds. I just chalked it up to weird, unexplainable idiosyncrasies in the IRS system, based upon other folks' experiences reported here.

If you want to try to get paper I bonds in 2023, the way that may give you the best odds of actually getting them is to over-withhold taxes throughout 2022. You could change your W-4 or make estimated payments.
User avatar
Topic Author
Wading Ashore
Posts: 190
Joined: Sat Feb 23, 2008 8:23 pm

Re: I-Bond Purchase with Refund Refused

Post by Wading Ashore »

tashnewbie wrote: Thu Sep 22, 2022 9:59 am
I filed Form 8888 this year with the hope of getting paper I bonds. I got the same response from the IRS as you. No apparent reason why I didn't get the bonds. I just chalked it up to weird, unexplainable idiosyncrasies in the IRS system, based upon other folks' experiences reported here.

If you want to try to get paper I bonds in 2023, the way that may give you the best odds of actually getting them is to over-withhold taxes throughout 2022. You could change your W-4 or make estimated payments.
Many thanks.
Post Reply