Glitches delay payments from IRS

Hundreds of thousands of taxpayers have been waiting longer than expected for their payments from the IRS.

Delays affected those who had fees for e-filing or tax preparation deducted from their refund or who obtained a refund anticipation loan. Those taxpayers will be mailed a paper check, even if they opted for direct deposit, the News-Leader of Springfield, MO reported.

Teresa and Steve Smith of Northville, IL, for example, expected a $2,100 stimulus payment to be directly deposited into their bank account by May 9. "Now, it will be mailed no later than June 20," Teresa Smith told the Detroit Free Press. The Smiths, who have three young children, used TurboTax and had tax preparation fees deducted from their refund. The Smiths got an e-mail alerting them to the problem from Intuit's TurboTax, which sold 16.5 million tax-preparation units for the 2007 tax year.

Intuit spokeswoman Julie Miller told PC World that anyone who paid the $20 e-filing fee by credit card won't be affected by the delay and would have their payment electronically deposited as expected.

Taxpayers who asked for their refund to be deposited into more than one account will also get a paper check.

Another mistake caused about 350,000 filers with children to be shorted the additional $300 stimulus payment per qualifying child. According to the IRS, the problem occurred in about 1 percent of returns eligible for the child stimulus payments. The problem was either caused by failing to check a certain box on paper forms, or by a software error in Petz Enterprises' professional and online software, ProSystems fx Tax software, and CCH's online CompleteTax software.

"To fix the problem, the IRS is taking extra steps to identify the affected taxpayers and send them separate checks to cover their qualifying children," the IRS said. Corrected checks will be mailed automatically in mid-July, and "taxpayers don't need to call or take any additional steps," the statement said.

The Treasury Department has already sent out about 67 million stimulus payments totaling about $57 billion.

While taxpayers are being urged to be patient, Cynthia Jeanguenat, an enrolled agent in Virginia Beach, VA, told MarketWatch that retailers' advertisements aren't helping matters.

"The public perception is that 'my check should be here,'" she said. "Bring your check to Wal-Mart, bring your check to the grocery store, we're all going to give you this money. However, the paper checks weren't going to go out until after May 16, after the direct deposits" and the mailing is still happening, she said.

You may like these other stories...

By Jason Bramwell, Staff WriterA new study by the Tax Foundation found that revenues from gasoline taxes and tolls only fund approximately 50 percent of state and local transportation projects.According to the report,...
Bay Area Woman Guilty in Investment Scam That Caused Over $9 Million in Losses A San Jose, California, woman was convicted December 18 of a federal fraud charge for running a Ponzi scheme that bilked more than 250...
By Teresa Ambord, Correspondent The state of Virginia doesn't recognize gay marriage as legal. That's not unusual, since less than one-third of states have legalized same-sex marriage. In Virginia, it's also...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.