Do you have a question about taxes or investing? You can write to me at beth.pinsker@marketwatch.com.
Dear Market Watcher,
Who do I contact to find the 2022 tax refund we directed to enter into an I-bond on our tax return? Since amounts less than $50 are not accepted for I-bonds, we received a deposit into our bank account of more than $20 in April 2023.
The remaining $4,300 was to go to US Series 1 Savings Bonds per our instructions on IRS Form 8888, which was included with our tax return.
Since we never saw the $4,300, we assumed it went directly to our I-bond account. However, we cannot locate it in our I-bond calculations. We have contacted the Treasury Department but have not received a response. What should be our next step?
s
Dear DS,
It's time to start making some phone calls, and it may not be easy. The main entity you have to deal with to find your lost I-bonds is the Internal Revenue Service, as they were supposed to hand you the paper I-bond certificates as your refund. It's very difficult to get a human customer service agent over the phone who can help you with an understaffed IRS, but it's not impossible.
If you're talking about a newly filed 2023 tax return, I would instead advise you to wait a bit. The filing season just started at the end of January, and anything that has to be released physically takes longer than electronic filings. So it will be entirely possible to have money in your bank account for the excess amount before the package arrives in the mail. The IRS advises giving up to three weeks before starting to make inquiries about late refunds and instead checking the Where's My Refund web-based tool.
But you're well past that threshold for your 2022 refund, so it's time to start asking questions. The first thing you should understand is that when you choose to get all or part of your federal tax refund in the form of I-bonds, they will be issued as paper certificates that will arrive in the mail; They do not access your TreasuryDirect.gov account. Refund Bonds are issued in $50 increments, and you can request a refund of up to $5,000 per tax return, but you may get multiple $100 certificates or a mix of denominations. Sometimes they arrive all at once, sometimes they come in multiple packages.
““I've never heard of anyone losing these things in the mail.”“
“If it's for a 2022 return, there's a problem. I've never heard of anyone losing this stuff in the mail,” says Dave Ena, a cyber bond expert who runs Tipswatch.com.
Check the status of your refund online or call the IRS Refund Hotline (800-829-1954) or their main customer service number (800-829-1040) and see if they can tell you something. It will take some time to go through the online list, which branches off in several directions, before you reach a live person. keep going. You'll have to enter your main Social Security number for your tax return and go through the steps, and you may have to call back several times if you reach a dead end. Think of it like a video game where you learn what obstacles you must avoid to pass each level, even if it takes several lives to do so.
If customer service can't help you directly, you may have to file more forms, such as IRS Form 3911, to begin tracking your lost refund. This is especially the case if your return is married filing jointly, because the IRS indicates that it cannot do an electronic refund trace on it. You can mail or fax the form to the location appropriate to your address, then sit back and enjoy the efficiency of filing IRS forms with paper.
There is also a Treasury form to replace lost I-bonds (FS Form 1048), but this asks for purchase date and serial number information, which you will not have because you never received the bond from the government. If the IRS is able to tell you that it has issued I-bonds and can provide you with the information, the IRS asks that you forward your questions to the Treasury Department's Retail Securities Services line at 844-284-2676.
You're owed money, so they'll have to find you eventually. Once you have your paper certificates safely, be sure to note the identifying information, in case you lose it again. You'll also need to have proof of ownership on hand if you decide to mail the certificates to TreasuryDirect.gov to add them to your online account or cash them at a financial institution.
After going through this experience, you may wonder whether choosing a tax refund in the form of I-bonds is worth it. It's a good question. It's tough, but otherwise, you can only buy $10,000 worth of I bonds per person per calendar year. Some savers looking to protect against inflation find this too restrictive, especially in times of high inflation when interest rates on Treasury securities are as good or better than market rates on money market funds or other Treasury products. Directing up to $5,000 of your tax refund is one way to invest more this way.
The prevailing rate on new bond purchases is a composite of 5.27%, which includes a fixed rate of 1.3% plus the inflation-adjusted portion, which changes every six months. That's more than most CDs and T-bills at the moment, so it can be a tough decision to make.
More about taxes
