The first Economic Stimulus Rebates started being directly deposited a little over a week ago and already there some major problems. First, because of a computer glitch on the IRS's part, some direct deposits have ended up in the wrong account. Since this problem has just been identified, no fix-it has been announced. The second problem is with about 350,000 taxpayers not getting their extra rebate for children. The cause is the Child Tax Credit box not being checked next to the child's information. This has been traced back to paper filed returns and a couple of tax software programs that did not mark the box. The IRS has announced that the missing extra money for dependents will be sent out in July.
Finally, it seems that many Refund Loan customers are threatening lawsuits against preparers (notably the big tax prep companies) because their rebates are coming by check. The issue seems to be that the customer was not told that the rebate would be mailed if they did a bank product instead of a direct deposit into their own account. I'm not getting into a discussion of whether the client would actually have chosen DD over a RAL if they had that information. (Not!) I am fascinated by the attorneys who are considering the class action suits. Are they so desperate for work that they are thinking about suing a preparer for not seeing into the future? Look at the timetable. The bill wasn't signed by the President until February 13th. Within a few days, the IRS started issuing details on how they would be handling the rebates. Up to then, everything was rumor and speculation. The timetable for issuing checks/DD wasn't released until mid-March. RALs are early season products. By the time the bill was signed on February 13th, I had done all but a couple bank products for the season. There is no way a preparer could have warned a client about the effect of doing a RAL on when they would get their rebate. But I am sure some desperate lawyer will round up a group of whiny taxpayers and use the system to line their pockets.