IRS glitch could delay stimulus checks for some tax service customers

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DECATUR, Ala. – The first round of stimulus checks were disbursed last week. However, some people that checked the status of their checks found their money had been deposited into an unfamiliar third-party bank account.

Goode Tax Service in Decatur said this happened to some of its clients.

Employees at the tax agency said local tax preparation services are becoming the focus of frustrations surrounding stimulus checks, but really, it’s IRS operations.

They say some refunds were sent to a third party bank for processing. The bank processes its own fee, the tax software fee, and the tax agency’s fee. The remainder of the money is disbursed to the client as a refund through the agency.

The problem is, according to the IRS, stimulus payments are automatically being deposited into the same temporary third-party account tax refunds went to.

Owner, Emmitt Goode Jr. said no one imagined this could create issues with stimulus checks.

“Our bank sent those checks back to the IRS, and that’s the problem,” Goode said.

Goode’s son said a glitch is delaying some of their clients’ payments.

“The IRS thinks these temporary accounts created by the bank are these people’s actual account numbers, and that’s not true.”

If banks reject the stimulus payments, the IRS will re-issue a paper check to the most current address on file.

The IRS launched a tool to edit your banking credentials online, however, Goode said the timing could have been better.

“The IRS opened a portal to update your bank information the day the checks were sent out,” explained Goode III. “That was too late.”

Unfortunately, many IRS offices have limited staff or are closed altogether. There’s not much one can do besides wait.

“I understand everybody’s frustrations certainly because some people are depending on the money because of cutbacks on the job, or lay-offs,” Goode III said.

Tax preparers said they hope things improve in time for the next surge of payments expected as early as this week.

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