STIMULUS PAYMENT PART TWO
April 29, 2020 - Douglas Myser
Stimulus payment part two. This is the second part of a series regarding the problems that are hampering the distribution of the IRS stimulus funds, that Congress and the President passed recently. Some payments were sent to the wrong accounts. Several million people who filed their taxes through tax preparation services firms were unable to get their payments recently because of confusion around their direct deposit information. The issue appears tied to "refund transfers" sometimes called Refund Anticipation Loans, or a Refund Anticipation Check. Through these offerings, tax prep companies give people their refund more quickly, minus a fee. The money is sent to users via direct deposit or on a debit card mailed to them. The tax prep companies then set up a temporary bank account to collect the user's full tax refund, often weeks later. More than 20 million households used this option when filing taxes in 2017. Stimulus payment part two.
The Treasury Department told TIME on April 17 that the IRS didn't have direct deposit information for tax filers who used a refund transfer and received their money on a debit card. As of April 22, the IRS website says that some of these payments may have been sent to the bank account or debit card tied to their tax prep company. The IRS has created confusion by not using clients final destination bank account information for stimulus payments", the spokesman continued, "We share our clients frustration that many of them have not yet received these much needed payments due to IRS decisions, and we are actively working with the IRS to get stimulus payments sent directly to clients accounts".
Likewise, a TurboTax spokesman said that the "IRS has the appropriate banking information for all TurboTax filers, which can be used by them to distribute stimulus payments. This is true regardless of whether a customer chose to receive their refund on a debit card or not.