Stimulus glitch: Much-needed money sent to tax preparers instead of taxpayers

Better Call Behnken

(Nexstar DC photo)

TAMPA, Fla. (WFLA) – As the IRS continues to issue direct deposit stimulus payments, many are getting a shock: Their money was deposited into an account they can’t touch.

That’s because the IRS is sending stimulus money to the account you used for your last refund, or to pay taxes. And that’s the problem.

Many people use third-party tax preparers, especially those who need a tax refund advance. Those are the very people who are likely to need this stimulus money most. But the IRS has been sending the money to the tax preparer’s bank account, instead of the client’s personal account.

“Now our money is in limbo because by the time we actually get it, it will be months from now because they’re going to send it back and then they’re going to have to try to find another way of sending it to us – that’s if they try sending it at all again,” said Rosa Hawkins, who used The Tax Experts in Brandon.

She, like many others, went to the IRS website to track their stimulus and saw a message that showed her money was sent to a bank account she didn’t recognize.

This has caused a mess. Tax preparers tell Better Call Behnken that they are getting hundreds of calls from angry customers who think they are trying to steal their stimulus money.

But Shawn Esterine of First Combined Tax Services in Lakeland says he can’t touch the money either. He says he uses a tax bank that processes refunds for clients. That bank, he says, rejected the mass deposits that the IRS tried to send him and sent the money right back to the IRS.

One of his clients, Carolena Clark, is devastated because she needs her family’s $3,900 stimulus payment.

“I’m the only one in my household that’s working right now because my husband got laid off because they weren’t getting enough customers,” she said. “And on top of that, I have three kids right now staying with me so right now I need all the help I can get.”

So what can you do in this situation? There’s no easy solution. Tax experts advise updating your banking information on the IRS website. The IRS will then have to either send your stimulus payment to your bank account or mail you a paper check.

The good news is that the money should still be allocated to you. The bad news is that it is unclear how long it will take before the IRS tries to send your stimulus money again.

“I just can’t believe that I have to keep waiting,” Hawkins said. “The money shouldn’t go back to the IRS, it should come to me.”

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