On this page
- What a missing refund usually means
- How the IRS pays a refund to a non-resident
- Confirming the refund was actually issued
- Why refund checks to Canada go astray
- What a trace is
- What happens if the check was cashed by someone else
- Uncashed, expired or returned checks
- Keeping your address current and where U.S. Tax Recovery fits
- Frequently Asked Questions
Your claim was accepted and the IRS shows it as processed. The refund check for the casino tax withheld from your winnings still has not reached your mailbox. That is a different problem from a claim still sitting in processing. The useful question now is whether the IRS already issued a payment, and if so, where it went. This article explains how a refund is paid to a non-resident, why checks mailed to Canada go astray, and what a trace means.
What a missing refund usually means
When someone says their U.S. refund is missing, they can mean quite different things. The difference comes down to one question: what has the IRS actually done with the claim so far?
In the first situation, no claim was ever filed. The 30% withheld at the casino and reported on Form 1042-S stays with the IRS until a claim asks for it back. Nothing has been issued, so nothing can be lost in the mail. In the second situation, a claim was filed and the IRS has not finished processing it. For that, the guide to checking on a gambling tax refund and the explanation of why a refund gets delayed are the better places to start.
The third situation is the one this article covers. The IRS processed the claim and issued the refund, but the money never reached the taxpayer. Usually a paper check went out and never arrived. In other cases it arrived but was never deposited, or someone else cashed it. The IRS records show the refund as sent, and the person expecting it has nothing in hand.
How the IRS pays a refund to a non-resident
When the IRS accepts a claim and agrees that too much was withheld, the Bureau of the Fiscal Service, part of the U.S. Treasury, issues the payment. That payment is always in U.S. dollars, and the IRS does not convert it to Canadian dollars.
Most non-residents are paid by paper check. The IRS can deposit only into a U.S. account or through a foreign or international correspondent bank that holds an account at a Federal Reserve Bank. An ordinary Canadian chequing account, even one held in U.S. dollars, does not qualify unless it runs through such a bank, so the Treasury mails a check instead. Can the IRS deposit my refund in a Canadian bank account? explains this in more detail.
The check goes to the address on the claim. The IRS treats that address as the taxpayer’s address of record until it is formally changed. Telling a casino, a bank or Canada Post about a move does not update IRS records, so if the address is out of date or incomplete, the Treasury still mails the check there. The check is also made payable to the name on the claim, which should match the name tied to the ITIN, and a bank looks at that name when the check is deposited.
Confirming the refund was actually issued
Before anyone looks for a lost check, the first question is whether the IRS ever sent one. The IRS has a refund status tool on its website, and it keeps a record of each tax year’s account that shows whether a refund was issued, returned or cancelled. A refund that was issued shows a date and an amount. A refund check that came back undelivered, or that expired, is recorded as well, and the money stays on the account in the taxpayer’s name. The IRS does not mail it again on its own. U.S. Tax Recovery can check what the record shows for you.
Why refund checks to Canada go astray
The IRS mails a refund check to the address on the claim and does not look for a newer one on its own. If you moved after the claim was made, the check goes to the old home. A Canada Post forwarding service may catch it, but only if you set one up and it is still active when the check arrives. Otherwise a new tenant or buyer may return it, set it aside or throw it away.
Some non-residents use a U.S. address, such as a winter rental, a relative’s house or a mailbox service. A U.S. Postal Service change of address does not forward mail to Canada, so the check sits at the U.S. address or goes back to the IRS. An incomplete foreign address causes the same problem, such as a missing country, postal code or unit number. This is one of the errors covered in common mistakes on a casino refund claim.
The last two causes happen after delivery. A Treasury check comes in a plain window envelope, and someone who was not expecting it may take it for advertising and discard it. A check can also be cashed by someone other than you, for example taken from a shared mailbox or endorsed by a former spouse, relative or roommate. A trace is what shows which of these happened.
What a trace is
A trace is how a taxpayer formally tells the IRS that a refund it issued did not reach them. The IRS uses the name, ITIN, tax year, refund amount and mailing address to find the refund record, then checks with the Bureau of the Fiscal Service whether the check was cashed. The IRS decides when a trace can begin and how to handle each request. It may open a trace, reissue the refund, or write back asking for more information. The IRS sets the pace, and it varies from case to case. U.S. Tax Recovery handles the paperwork for you.
What happens if the check was cashed by someone else
A trace can show that the check was negotiated, which means someone cashed it or deposited it at a bank. In that case the IRS passes the matter to the Bureau of the Fiscal Service, which sends a claim package to the address on IRS records. The package usually includes a copy of the front and back of the check as it was endorsed.
The signature on the back is the part to study closely. If it is not yours and you did not allow anyone to sign for you, you say so in the claim. If you recognize the deposit, for example a family member banked it for you, there is no forgery to report. The Treasury then compares the endorsement with your sample signatures and may contact the bank that took the check. It decides whether the endorsement was unauthorized and whether a replacement payment is issued. That decision belongs to the Treasury alone, and it sets the pace, which varies from case to case.
Uncashed, expired or returned checks
A check can reach you and still never turn into money. It sits in a drawer, gets mislaid during a move, or waits for a trip to the bank that keeps getting put off. A U.S. Treasury check does not stay good forever. The face of the check prints how long it can be deposited, and once that limit passes, the check is cancelled and the funds go back to the IRS.
A check returned as undeliverable follows a similar path. If the postal service cannot deliver it, the check goes back to the IRS. In both cases the refund is not lost. The money stays on the IRS account in the taxpayer’s name until the taxpayer, or an authorized representative, asks the IRS to reissue it, usually after confirming a current mailing address. The IRS decides whether and when a new check goes out.
A check that is still valid is not always easy to deposit. Some Canadian banks are hesitant to accept U.S. Treasury checks, and a branch may decline one, send it for collection rather than crediting it right away, or ask for extra identification. Policies differ from bank to bank, so it helps to ask the branch first.
Keeping your address current and where U.S. Tax Recovery fits
A replacement check goes to the address the IRS has on file, so that address has to be right first. The IRS decides which address it relies on and when its records update. If you have moved, tell U.S. Tax Recovery so your address can be kept current.
U.S. Tax Recovery prepares and files documents for you. It is an IRS Certifying Acceptance Agent, listed on the IRS’s Acceptance Agents directory for Canada. That is a credential for handling ITIN applications and identity documents, and it is not an endorsement. The company is not affiliated with the IRS and cannot decide whether a refund is reissued or when. The steps the service follows are laid out separately.
Frequently Asked Questions
My casino tax refund never showed up. Does that mean the IRS rejected my claim?
Not necessarily. A missing refund can mean the claim is still being processed, the IRS adjusted or denied it, or a check was issued and lost in the mail. Each situation has a different fix. The first step is finding out which one applies, usually by reading any notice the IRS mailed or checking the refund status for that tax year.
Can the IRS just send my refund straight to my Canadian bank account?
Generally no. The IRS sends direct deposits only to a U.S. account or through a foreign or international correspondent bank that holds an account at a Federal Reserve Bank. A non-resident without either is normally paid by a paper check drawn on the U.S. Treasury, in U.S. dollars, mailed to the address on the claim. That check then has to be deposited at a bank that accepts U.S. Treasury checks.
What is a refund trace?
A trace is how the IRS looks into a refund check that was issued but never arrived. It checks with the Bureau of the Fiscal Service whether the check was cashed, and the next step depends on what that search finds. U.S. Tax Recovery handles the paperwork for you.
What if the trace shows somebody else cashed my check?
The Bureau of the Fiscal Service usually sends a claim package that includes a copy of the endorsed check. If the signature is not yours, you say so in the claim. The government then reviews the endorsement and decides whether a replacement is issued. Neither the taxpayer nor a preparer controls that decision.
I found an old refund check I never deposited. Is it still any good?
It may not be. U.S. Treasury checks stop being payable after a set period, and a bank will refuse one past that point. An expired or returned check does not cancel the refund itself. The IRS can be asked to reissue it, and it decides whether and when a new check goes out.
Timing & status