Some Stimulus Checks Are Being Sent To The Wrong Accounts
When I looked into why these two tax prep giants were being heavily searched and discussed, I found out that it's because a lot of people seem to be quite miffed at them both, with accusations of screwing up the arrival of stimulus checks and causing stress and confusion among those looking to get their share of the money promised them by the federal government.
AccountingToday.com (like you don't have them bookmarked) says the problem is that stimulus checks are being deposited into the wrong accounts.
Wait, aren't the stimulus checks being sent out by the IRS? What's the connection with tax preparers?
The problem stems in part from tax preparation companies that used temporary bank accounts in previous years where taxpayers could receive their tax refunds, while the tax prep companies took a portion of the refund for payment. The temporary bank accounts were later closed, but the IRS relied on the old information it had on file for those bank accounts when it began making direct deposits this week of the latest round of stimulus payments.
Okay, so your stimulus check went to the wrong account in the wrong bank. Let's just have the check sent to the right account in the right bank and get that money to those who really need it. How hard is that?
It seems as though it's really hard, because under law, it can't work like that. The bank that received the deposit funds must send them back to the IRS. But, according to AccountingToday.com, you have to contact the IRS yourself to update your information.
Doing all that doesn't mean that you'll get your stimulus payment any quicker, or even at all. I went to the IRS website to see what they suggested you do if this scenario should happen to you.
By law, the financial institution must return the payment to the IRS; they cannot hold and issue the payment to an individual when the account is no longer active. If Get My Payment shows "Payment Status #2 – Not Available" you will not receive a second EIP.
A lot of the most pointed criticism of the IRS on this topic is that people are being told by the IRS that their only recourse at this time is to quickly file their 2020 tax return and claim what's called "The Recovery Rebate Credit" to get their payment and, if they have one coming, their tax refund, too.