THE ACCOUNT HOLDER SAY HE DOESN'T HAVE TO PAY IT BANK THE IRS SAYS IT IS OUT OF THEIR HANDS
Criminal Defense Attorney
Gather all your documentary proof and call the police. The recipient does not just get to keep it. It is comparable to when an ATM spits out way too much money - the person receiving MUST return it.
If you suspect someone used your identity information to steal your refund, call the IRS Identity Protection Specialized Unit at 800-908-4490 and fill out an IRS Identity Theft Affidavit, Form 14039 (found here: http://www.irs.gov/pub/irs-pdf/f14039.pdf). The IRS may ask for certain documents to help verify your identity, such as a photo ID, W-2 forms and previous tax returns.
Please see attached link on how to proceed (which depends on who made the error):
My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained.
You can civilly sue the recipient of the funds for Money Had and Received.
Since the essential inquiry in a Money Had and Received suit is whether the defendant has received money that rightfully belongs to another, it is very likely you will prevail, assuming the facts as you have stated them are correct.
This answer is for informational purposes only and does not create an attorney-client relationship.