The hidden risk that turns a 21-day refund into a 10-week nightmare

Most taxpayers choose direct deposit because it’s the fastest refund method. But there’s one critical error that can destroy your timeline:

Entering an incorrect bank routing or account number — or using a mismatched account name.

When that happens, the IRS attempts the deposit… and the bank bounces it back. Not only does this fail — it triggers a chain reaction inside the IRS system that leads to one of the most painful refund delays.

The IRS Code That Confirms the Rejection: TC 841

If your direct deposit fails, your transcript will show:

TC 841 — Refund Cancelled/Dishonored Check

This means:

• The bank rejected your refund
• The deposit never reached your account
• Your funds are being returned to the U.S. Treasury
• The IRS will now issue a paper check instead

This is not a small delay — it resets the payout process.

The 3 Common Reasons Direct Deposits Fail

1. Incorrect Routing Number

Even a single digit wrong — refund is rejected.

Example:
Correct routing: 041000124
Entered: 041000142
Result: BANK REJECTS

Routing numbers must match your financial institution EXACTLY.

2. Incorrect Account Number

If your account number is wrong — even by one digit — the bank cannot match it.

A refund cannot “land in someone else’s account.”
Banks are required to reject mismatched deposits.

3. Name Mismatch or Ownership Error

This one surprises most taxpayers.

Examples:

• Refund listed to JOHN SMITH
• Bank account belongs to JOHN & SUSAN SMITH (joint)

Or:

• Refund issued to JAMES WASHINGTON
• Bank account belongs to James Washington Jr.

Most banks use identity-matching procedures.
If the names don’t align — they reject the deposit.

And the IRS will not contact you first.
They simply change the refund method to paper.

What Happens After TC 841: The Paper Check Delay

Once the bank sends the money back:

1. IRS applies TC 841 to cancel the deposit
2. Refund is sent for physical check printing
3. Check is mailed to the postal address on file

This typically adds:

4–8 additional weeks

And if:

• you recently moved, or
• your address is incorrect, or
• USPS forwarding isn’t active

your refund can literally disappear into mail limbo.

What To Do If Your Direct Deposit Was Rejected

Step 1: Check your IRS transcript

Look for:

• TC 841 (Refund Reversal)
• TC 846 (Refund Re-issued later as paper check)

Step 2: Verify your address

If necessary, file Form 8822 to update it.

Step 3: Call your bank

Ask:

• Was the refund rejected?
• Why? Name mismatch? Bad routing? Wrong account?

Step 4: If you have a better bank account

You cannot fix it for the current refund — that one is already locked to a paper check.
But you should update bank information for future years.

How to Avoid This Disaster Next Year

Golden rule: Copy routing and account numbers from the source

Never rely on:

• screenshots
• old checks
• memory
• online guesses

Instead, use:

• your official bank account page
• your printed check
• direct confirmation from your bank

Also avoid:

• depositing to someone else’s account
• business accounts if refund is personal
• accounts with name mismatches
• closed or dormant accounts

Special Warning for Prepaid Cards and Digital Banks

Refunds can be rejected if:

• the account is not verified
• secondary identity is required
• card is new or unused
• name on the card doesn’t match IRS return

This is common with:

• CashApp
• NetSpend
• Green Dot
• Chime
• Go2Bank

If the IRS sees that the deposit cannot be validated:
TC 841 triggers
Paper check follows

Entering the wrong bank number or using an account that doesn’t match your IRS identity is not a small clerical mistake.

It’s a refund-killing error.

Once TC 841 hits — it’s over.
Your refund will not go to your bank.
It will be sent as a paper check through the slowest possible route.

The fix is prevention — not repair.

Your refund isn’t lost.
It’s just trapped in the paper-check pipeline.
And now you know why — and how to avoid it next time.