Do I give back a lot of money that no one will ever ask for?

March 27, 2015 5:08 AM

$40,000 was deposited in my bank account last week, and it's not mine. I've figured out that it was tax money owed to my old employer (from 2013) but they never claimed it so the tax office waited until now and forwarded it to me. What do I do now?

The details are needlessly complicated, but as far as I can tell my old company paid some tax on my behalf due to complex foreign employment tax laws, so I had a large tax return that year but most of it should have gone to the company. I signed a form saying they can cash the cheque and keep the money, but it looks like they never cashed the cheque. So, a year after the cheque was issued without being cashed, the tax office cancelled the cheque and desposited the money directly into my account. By this point it's about two years since I was last employed by the company.

This is my train of thought at the moment:
From what I can tell, the money is legally theirs.
No one in the company has noticed this since late 2013, so it seems unlikely that they would notice now.
So, unless I get in touch with them, they are unlikely to come to me looking for the money.
This is a huge multinational company, and no one's going to be hurt if I keep the money.
I'm not badly off, and don't NEED the money and will live perfectly well without it, but of course would love to have it. If I did end up keeping it, I would want to give a good chunk of it away to good projects/charities to spread the goodness around.
But it's not my money. And, despite how much I'd like it or how little it matters to a giant corporation, it's still not my money.

I think there are a couple of basic options:
1) Give it back.
2) Keep it, spend it, hope that no one ever comes looking.
3) Keep it, leave it it some high interest account, and if someone comes asking I can give it back, but in the meantime it's been earning interest.

So what do I do? What would you do?

posted by anonymous to Work & Money (32 answers total)

Call the tax office and explain the mistake.

Do you really want to live your life with this over your head? No.
posted by warriorqueen at 5:15 AM on March 27, 2015 [31 favorites]

Do you actually know it's legally theirs? They never cashed the check and the tax office sent it to you, maybe you have a right to it. I would talk to a lawyer.
posted by mai at 5:22 AM on March 27, 2015 [21 favorites]

... it's not mine ... the money is legally theirs ... it's not my money ... it's still not my money ...

As tempting as it would be to keep it (and I won't lie; I would be VERY tempted to keep it) as you say, it's not yours, and there's only one word for keeping something that's not yours.

In addition to just doing the right thing by returning it, you really don't know that they will never miss it. An internal audit can reveal it, years in the future.

But, I wouldn't just mail off a check to them, or the IRS. You need to do your due diligence on this by contacting your ex-employer and the IRS and getting it squared away.
posted by The Deej at 5:23 AM on March 27, 2015 [4 favorites]

Ethics aside, I would not assume that just because it dates from 2013, no one is going to notice it or come looking for it. At my workplace, at least, the internal audit folks are regularly looking at various issues from way longer ago than 2013. I think it's entirely possible this could turn up on someone's radar at some point. You really don't want to have spent the money when they come looking.

I totally get the temptation but in your shoes I'd contact the company and find out how to return the money in a documentable way so it's very clear if anyone asks later that you did the right thing here.
posted by Stacey at 5:27 AM on March 27, 2015 [5 favorites]

No one in the company has noticed this since late 2013, so it seems unlikely that they would notice now.

Yeah, no. On a purely practical level, people notice stuff like this all the time. (I just got done squaring some invoices with a vendor that went back to 2009 and that they had never originally sent us in the first place! They still expected to be paid when they discovered their mistake.)

I would talk to an accountant to figure out how much (if any) of the money is yours, and then get in touch with someone at your old company's accounting department. You want to make sure that you have a very good record of repaying the money so they don't try to come after you twice.
posted by pie ninja at 5:36 AM on March 27, 2015 [4 favorites]

I regularly work on accounting issues for my employer dating back to the 1970s, so it's definitely possible someone could come looking for the money.
posted by Jahaza at 5:54 AM on March 27, 2015 [5 favorites]

One day they'll do an audit with an external auditor and you will be on the hook. I hate to say it - because holy crap, that's a lot of money! - but you don't want to be dealing with this in 2018. I am in accounting training and I do a little bit of accounting support work at my job, and believe me, there will come an audit. Two years is not very long in accounting terms, because an external audit is a big deal and is done regularly but not Every Six Months or anything.
posted by Frowner at 6:01 AM on March 27, 2015 [4 favorites]

Did you read the recent article about the high schooler who had thousands of dollars deposited in his account by error, spent it all, and was then arrested? Don't risk it.
posted by a fiendish thingy at 6:16 AM on March 27, 2015 [6 favorites]

Talk to the IRS or Revenue Canada or whomever the depositor is. Then follow up with your company. I'd segregate it from your money now (fee free account, interest accruing account, no-penalty CD) until it is straightened out.
posted by tilde at 6:20 AM on March 27, 2015 [1 favorite]

You contact the old company to give the money back and make sure you remind your old boss/boss's boss of your straight forward honesty and dedication. 40k is a lot right now, sure, but the reference these people could give you down the road could mean an extra few grand on your paycheck for years to come.
posted by robocop is bleeding at 6:29 AM on March 27, 2015 [2 favorites]

Notify them and give the money back. It will get noticed, you will be on the hook, and you will be royally screwed if you've spent it.
posted by gnutron at 6:46 AM on March 27, 2015 [1 favorite]

Alas, stealing from a large company because "no one's going to be hurt if I keep the money" still means you are a thief. There really is no moral question involved here. It is more like, everyone has their price, what is yours? I feel your pain though.
posted by jcworth at 6:53 AM on March 27, 2015 [2 favorites]

If the money doesn't legally belong to you, yes you could go to jail for spending it. So you need to call your former company and get this sorted ASAP.
posted by MsMolly at 7:07 AM on March 27, 2015 [1 favorite]

Just another person to emphasize that 2013 is not very long ago at all. In my experience, large companies may be more likely to "miss" money for a longer period than small companies, but also to realize it several - or more - years down the line.

I'd move the money into a separate, interest-bearing account, contact a lawyer if you have one, and then reach out to the IRS/tax department and to the accounting department at your former company. And document everything!
posted by Caz721 at 7:15 AM on March 27, 2015 [1 favorite]

I signed a form saying they can cash the cheque and keep the money . . . . From what I can tell, the money is legally theirs.

Which part of that doesn't answer your question? Their failure, so far, to cash a check (if it even went to them) does not let you off the hook on the agreement you made with them.
posted by beagle at 7:18 AM on March 27, 2015 [2 favorites]

It sounds like the cheque was made out to you, but you had authorised your company to cash it and keep it. Perhaps they were unable to cash a cheque written to someone not them. They could be expecting a call from you someday. I am not sure why it would show up on the internal audit unless the auditors looked at all the signed documents (which is a possibility).

I would not talk to HR or accounting first. I would contact your old boss who may still be there. That person is more likely to say to keep it. If they do, ask for an email to that affect. Otherwise, follow their instructions to giving it back.
posted by 724A at 7:28 AM on March 27, 2015

The core of this question seems to be, should you do what you know is right, or should you do what you think you can get away with? Because in this case, there's some distance between those two possibilities.

Consider that the distance is maybe not as big as it appears, as many folks have answered here there's a good chance this would be found out eventually.

I think more importantly, there are people in this world who do what they know is right, and people who do what they can get away with. I think you have to decide which of those you want to be.
posted by FishBike at 7:36 AM on March 27, 2015 [2 favorites]

Well my worthless stepdad kept and spent some money that ended up in his account and he ended up being convicted of a felony, so there's that.
posted by BlahLaLa at 8:12 AM on March 27, 2015 [12 favorites]

I would work with a lawyer for this, because I generally just don't trust large mega corps to do teh right thing so i would'nt want to be all like "hey! remember me?! want 40k that may or may not belong to you?" and trust their answer is right and in my best interest.
posted by WeekendJen at 8:24 AM on March 27, 2015 [8 favorites]

Let's not worry about moral/ethical questions at the moment.

I am going to make up a number to illustrate a stance...

Legally, there may be a 1% chance that some timing guideline set forth by the original agreement or by the foreign country or in your local jurisdiction actually puts that money lawfully in your hands. That means that paying a lawyer as much as $400 for his or her advice is even money.

Add to that calculation the value of never needing to second guess this decision.

Add to that calculation the value of (if they say you can keep it) having a record of having proactively looked in to this and sought legal counsel... The record of you having looked in to it and made a decision with the input of counsel eliminates any illusion of malice or culpability. Something may happen later that makes you give it back but if you have a record of making this decision with the best of intentions, you have a great case for not having any penalties levied against you.

Of course if the lawyer decides that you can keep it, don't spend it immediately, but do save it somewhere where it is growing, and keep it relatively liquid if they communicated any chance of future issues.

The lawyer call is an easy one here in my opinion...
posted by milqman at 8:51 AM on March 27, 2015 [9 favorites]

1) Give it back.

Obviously the right thing to do and carries a small chance that your former employer tells you that the issue is all wrapped up from their end and they'd rather you keep the money rather than deal with it now.


2) Keep it, spend it, hope that no one ever comes looking.

If they do come looking, you're going to have to come up with $40,000 in the best possible case. It's more likely that there will be penalties and/or interest and potentially a civil and/or criminal court case, maybe even jail time. I simply could not live with this hanging over your head no matter how unlikely any of those consequences are.


3) Keep it, leave it it some high interest account, and if someone comes asking I can give it back, but in the meantime it's been earning interest.

This is basically a slightly lower risk version of number 2. I suppose that if you made a good faith effort to get the money into the right hands, you might be able to pay them the money back and go on about your life but the risk of penalties, a lawsuit, or a criminal case is still too high.


From the IRS's perspective, the money is yours. They don't know or care about your arrangement with your former employer. But YOU do and the company likely will if and when anyone happens to check. At the very least you need to make a solid attempt to return the money that you owe them and document that attempt as much as you can (even if it's just taking notes about who you called and when and what was said that's relevant). If someone tells you to keep the money, great. If no one can figure out what to do with it, then keep it and just use it to earn interest until you're 100% certain that no one will come asking about it (10 years or so unless the company dissolves before then or something) and then spend it or combine it with your other savings or whatever.

The odds of someone asking for that money later on down the line might be low but the potential consequences are too harsh to risk it.
posted by VTX at 8:54 AM on March 27, 2015 [1 favorite]

From what I can tell, the money is legally theirs.

That's your answer. This money isn't yours. Call the relevant office and tell them.
posted by feckless fecal fear mongering at 9:17 AM on March 27, 2015 [2 favorites]

I wouldn't just call them up and tell them, because it does sound like there is a possibility that the money, or some of the money, IS yours. DEFINITELY ask a lawyer about this.
posted by showbiz_liz at 9:25 AM on March 27, 2015

The details are needlessly complicated, but as far as I can tell my old company paid some tax on my behalf due to complex foreign employment tax laws, so I had a large tax return that year but most of it should have gone to the company. I signed a form saying they can cash the cheque and keep the money, but it looks like they never cashed the cheque. So, a year after the cheque was issued without being cashed, the tax office cancelled the cheque and desposited the money directly into my account.

I wonder if it didn't get deposited because someone else in the corporation questioned if it was rightfully theirs. I only know US tax law - and not as a professional - but if that money was paid to the foreign government as if it was withholding from your compensation, not as their obligation (as would be, say, the 7.5% of SSI that an employer pays in the US) then they may have put it in their own books as compensation paid to you.

Was that part of your officially negotiated compensation? No, not from your perspective. But for their own accounting purposes it might have been. They could have dropped the ball on depositing this check. They could have made a decision not to. Hell, they could have deposited it and this is actually a mistake on the part of the foreign government.

This is tough to unwind, but I do agree with everyone who says don't just take it and walk on your way. I'm guessing you're in the UK from your spelling of cheque so I don't know what your protections/liabilities are with regards to this corporation coming after you or the foreign transfer being reversed.

I'd talk to a lawyer about it, personally. If I decided I was going to view this as compensation they paid me I'd at least put it in an escrow account and let it sit for some years. I have no idea what limiting statutes there might be for you, if any.
posted by phearlez at 9:34 AM on March 27, 2015

Coming back with a further thought on how this will almost certainly come to light:
Chances are that if the bookkeepers and HR people did this correctly, when you signed the agreement, knowing precisely how much of a refund would be coming, which you signed over to them, they booked it as a miscellaneous receivable. That is, one that's not tracked in their normal billing system (in which agings would flag old receivables for action) but exists only as a bookkeeping entry backed up by your agreement. The other side of the transaction would be the money they fronted for you. In a mega-corporation, there may be many transactions of various kinds that make up this miscellaneous receivable account. Auditors, internal and external, don't necessarily comb through the whole list every year to see what's still real and what's not, because the amounts are not "material." But sooner or later, they will assign an accounting intern or other flunkie to rectify the account, write off what's not real anymore, work on collecting what's collectable, etc. And when that happens, they will figure out that you never signed over the money, and track you down.
posted by beagle at 9:37 AM on March 27, 2015

Personally, I would talk to an accountant or attorney to try to figure out what the deal is, but I would lean toward just keeping it, but not spending it -- like, put it in some sort of savings account. Then in a few years, if it's still sitting there without the company looking for it, then they clearly aren't ever going to collect and it's yours.
posted by AppleTurnover at 10:10 AM on March 27, 2015

I wouldn't trust anyone at the old employer. If you're gonna give it to anyone, it should be to the tax authority/agency.
posted by brownrd at 12:51 PM on March 27, 2015 [2 favorites]

Definitely could result in a white-collar crime conviction. Get a lawyer or financial advisor who specializes in complicated tax stuff. Figure out what rights you have. Maybe it legally has rolled to you and they waived their rights to it by not spending it and you can have it! Maybe not and you are obligated to get it to them! But don't spend it without figuring it out.
posted by amaire at 1:04 PM on March 27, 2015

If you keep it, you probably owe taxes on it.
posted by 724A at 2:27 PM on March 27, 2015

"Georgia teen who spent $31K mistakenly deposited into account charged with theft"
posted by Flipping_Hades_Terwilliger at 2:46 PM on March 27, 2015 [1 favorite]

5th'ing the lawyer answer. The problem with contacting the company is if someone on the other end tells you 'oh don't worry about it, it's your money' and then you act on that information... You still may have some liability associated (the person may not have been authorized to give that answer, etc).

Yeah, being honest here will cost you some money, but a lawyer will help ensure that you contact the right people in the right way. Putting it in an interest accruing account while you figure this out sounds like a good idea as well (separated from your money), but a lawyer will probably direct you on how to best handle the money until it gets back to your old company (or eventual charities).
posted by el io at 9:16 PM on March 27, 2015

I'd put it into the account but only because if you paid it back the idiots would probably mess that up too and come looking for the money anyway.

Also, do you think the company would give the money back if the roles were reversed?
posted by fullerine at 7:52 AM on March 28, 2015