The Refund Reversal Nobody Wants to See

You’re checking your IRS transcript and suddenly you see it:

TC 841 – Refund Reversed

If you don’t know what it means, it can be alarming — but here’s the truth:

TC 841 is not a denial of your refund. It means your bank rejected the IRS deposit and returned the money back to the Treasury.

Your refund exists — you just didn’t receive it.

What Causes a TC 841 Direct Deposit Rejection

Banks reject IRS deposits for several specific reasons:

• Wrong routing number
• Incorrect account number
• Trying to deposit into a closed account
• Bank account does not match taxpayer name
• Joint account mismatch (refund tied to one person only)
• Refund amount exceeds the account limit
• Attempt to deposit into a business account not allowed
• Prepaid card limitations
• Bank’s anti-fraud filters triggered

The most common cause: a bank name mismatch
(example: refund issued to “John & Sarah” but account is only in Sarah’s name)

Step-By-Step: What Happens After TC 841

Here is the exact timeline of events:

Step 1 – IRS issues refund

TC 846 appears
Refund sent to bank electronically

Step 2 – Bank rejects it

Bank returns deposit
IRS receives reversal signal

Step 3 – TC 841 posts

Refund marked as returned to IRS

Step 4 – Convert to paper check

IRS switches payment method
New issuance scheduled

Step 5 – Check printing cycle

Paper check is issued
Typically 4–8 week delay begins

This is why a TC 841 can turn a 21-day refund into a 60-day wait.

The Immediate Fixes You Must Do

If TC 841 shows up — DO NOT just wait passively.

1. Log into your IRS Online Account

Check your mailing address
Make sure it is current
If not — file Form 8822 immediately to update it

2. Consider requesting re-issuance to direct deposit

If allowed, you may be able to request a corrected bank account number via IRS Online Account

3. Call the IRS refund line after TC 841 posts

1-800-829-1954
Follow prompts for refund return/replacement

4. Ask for a “refund trace”

This confirms whether the bank rejected the deposit
AND that the IRS has initiated a check reissue

5. If the check is lost or delayed

File Form 3911 to initiate a stop-payment
And request a reissue

How to Prevent TC 841 from Ever Happening Again

Before filing next year:

• Verify routing and account numbers digit by digit
• Use a personal bank account in your own name
• Avoid prepaid cards with thresholds
• Avoid business accounts
• Avoid joint accounts unless all names match the tax return
• Ensure the bank accepts IRS ACH deposits

If you are unsure — call your bank and ask:

“Can a U.S. Treasury direct deposit be accepted into this account?”

This one question can prevent a 6-week disaster.

Reading the Transcript Sequence

You’ll typically see this progression:

TC 846 – Refund Issued
TC 841 – Refund Reversed (Bank Rejection)
TC 971 – Notice Issued (explaining issue)
TC 840 – Manual Refund Request (Paper Check)

If you see TC 840 — the check is being printed.

If you see a second TC 846 — the check is on its way.

The Worst Mistake After a TC 841

Do NOT:

• File another tax return
• Re-apply using different bank accounts
• Contact your bank repeatedly for answers
• Contact TAS prematurely

The IRS must complete the reversal and re-issue cycle — YOU must ensure your address and account info are accurate.

TC 841 is not a rejection of your refund — it is a rejection of the delivery method.
Your refund wasn’t denied — it bounced back due to account-related issues.
Once corrected, it will be re-issued as either:

• A direct deposit (if corrected), or
• A paper check (default method),
  which adds 6-8 weeks to the timeline.

By knowing what TC 841 means — and reacting fast — you can stop the delay from stretching into months.