Millions of Americans find their economic relief money in payment purgatory

Friday, April 17, 2020

Millions of Americans find their stimulus money in payment purgatory

Dozens of Action News viewers reached out to us about an apparent glitch sending their stimulus payments to the wrong accounts, so we investigated what went wrong and how you can s

FRESNO, Calif. (KFSN) -- Dozens of Action News viewers reached out to us about an apparent glitch sending their economic relief payments to the wrong accounts, so we investigated what went wrong and how you can still get the money.

Millions of Americans are finding out that their share of the government's economic relief package has disappeared into a payment purgatory.

The IRS and tax preparers are discovering most of these taxpayers have used big tax preparation firms.

In a lot of cases, those firms will calculate your refund and give it out immediately, minus fees.

"We'll take it from the refund of your tax return, and we'll just put it on an Emerald card or net spend card or give them a check," said tax preparer John Engelbert, of Engelbert Tax Services.

For economic relief payments payments, the IRS went looking first for a taxpayer's direct deposit account, which doesn't work for most of the people who took the prepaid route.

"The problem is the IRS receives the tax preparation firm's bank account information," Engelbert said. "They don't get the actual taxpayer's."

Several Action News viewers said their money got sent to some bank account they don't know.

We reached out Thursday to those big tax preparation firms -- Intuit TurboTax, Jackson Hewitt, and H&R Block -- to ask what steps they're taking to fix the problem.

They all reached out late Thursday (after our television report aired) and pointed the finger back at the IRS.

Intuit said, "The IRS is responsible for determining taxpayer eligibility for receiving a stimulus and, if a taxpayer is eligible, how and when the stimulus payments will be delivered to them."

Jackson Hewitt statement read,

"Jackson Hewitt does not have the stimulus funds from the IRS nor does Jackson Hewitt have control over when the IRS will release funds to taxpayers. If a client received their refund on a prepaid card, clients may want to go to the IRS.gov website and update their banking information. Jackson Hewitt is committed to keeping clients up-to-date during this unprecedented time."

H&R Block's comment was, "The IRS has bank account information for all H&R Block clients who received tax refunds electronically, and is determining when and how stimulus payments are distributed. They have created confusion by not always using clients' final destination bank account information for stimulus payments. 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 client accounts."

The IRS has stated that they are using information for a taxpayer's last filed tax filing (either 2019 or 2018) to determine eligibility. They have also stated that they are using information on that tax filing, including direct deposit information, to send the stimulus payment.

The bank account information for TurboTax filers is transmitted to the IRS as a part of the tax return. 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, selected refund transfer or other services.

We are seeing some TurboTax customers who chose refund transfer or a debit card to receive their refund receive their economic relief payments to these accounts. Any TurboTax customer who selects a refund transfer or a debit card that gets a stimulus payment sent from the IRS to those accounts will receive those stimulus payments without delay or fees.

The IRS would be the best source for additional information related to their online stimulus tracking tools and payment details and timing."

We followed up and asked again about people who chose to get prepaid refunds and they told us: "We have been contacting Emerald Card clients with any information we have about their stimulus payment, including reminding Emerald Card clients who no longer have their card that we are here to help and will reissue cards so they can use their stimulus payment. "

An IRS spokesman told us they'll make it right, but it'll probably take some time.

Their website says they'll issue letters in the next 15 days to people they've sent stimulus money.

They will also set up a special portion of their site for people to ask them, "What happened to my refund?"

"And the IRS is going to go into the system and try to get your funds back or hopefully H&R Block, Liberty Tax, Jackson Hewitt will send the money back, and then the IRS can fix it," Engelbert said.

The IRS says they'll send out checks if the economic relief payments get bounced back to them.

You can check on the status of your stimulus money and even hurry it up if the IRS does not have your direct deposit information by using the "Get My Payment" page, which is linked to the front page of the IRS website.

That's also where the "What happened to my refund?" section should appear in the future.

But the corrections could take weeks or even months at a time when every dollar counts for a lot of people.

For more news coverage on the coronavirus and COVID-19 go to ABC30.com/coronavirus

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