Still waiting for your tax rebate from Uncle Sam? I am. And apparently I'm not alone.
Due to a combination of mishandled electronic deposits, IRS software bugs, and tax-program problems, hundreds of thousands of taxpayers have yet to receive their money or are otherwise being shortchanged.
The Internal Revenue Service acknowledges that it outright botched the direct deposit of 1500 tax rebates by putting the money in the wrong accounts. It also says that nearly 350,000 taxpayers have not received the $300 child credit that is part of the economic-stimulus plan--in some cases because of IRS software glitches, and in other instances because the taxpayers left a check box blank on their tax forms.
And if, like me, you're among the millions who filed taxes online using software such as H&R Block's Tax Cut or Intuit's TurboTax, you might be waiting longer than you expected, too.
"There has been a lot of concern and confusion on this matter," says Intuit spokesperson Julie Miller.
I was one of those confused--and I was more than a bit concerned.
Rebate Waiting Game
I used TurboTax desktop software to do my 2007 taxes. I filed online in mid-April, and I opted to have my federal and state refunds deposited directly into my checking account. Like many Americans, I've also been waiting anxiously for the rebate associated with the government's economic-stimulus plan. According to the IRS payment distribution schedule, I should have received my rebate weeks ago.
Last week, however, I learned that I'll have to wait nearly two months longer because of something that I consider a glitch, but that Intuit and the IRS say I should have known about.
Here's the deal: Since I opted to have my tax refunds deposited into my account, and to have Intuit deduct the $20 e-file fee from the federal refund, I assumed that my stimulus rebate would be electronically deposited as well. Not so, I was told.
The IRS says that anyone who used TaxCut or TurboTax software and decided to have their $20 e-filing fee deducted from their federal refund would receive their stimulus rebate via snail mail--even if their refund (minus the $20 e-file fee) was to be deposited electronically.
The same applies to people who chose to receive refund anticipatory loans from tax-prep services (such as H&R Block), to taxpayers who opted to have their electronic refund deposits split into two separate accounts, and to those who use a private tax preparer such as H&R Block or Jackson Hewitt.
My Mistake? The Blame Game Begins
Intuit's Miller says that had I chosen to pay the $20 e-filing fee with a credit card, the stimulus rebate would have been electronically deposited into my checking account. This explanation made little sense to me.
My wife and I are, to put it mildly, mad. After all, I have toys to buy and (unfortunately) bills to pay. But apparently we aren't the only ones who are angry.
Last week Intuit sent e-mail to customers who chose to have their e-filing fees deducted from their refund, saying that they should not rely on the government's posted time estimates for receiving stimulus rebates. "This situation, while not unique to TurboTax, is understandably causing some concern and confusion," the message says.
Miller explained to me that the company did its best to alert its TurboTax customers to the problem. "We posted updates on this issue on our Web site on March 23," she says.
She says that the stimulus plan wasn't signed off by President George W. Bush until February, and that it took until March for the government to figure out how the rebate payments would be made. TurboTax and other services simply didn't have enough time to reconfigure the way they electronically deposit federal and state tax refunds to include the rebates, she says.
Hindsight Is 20/20
My complaint with TurboTax is that Intuit should have been more proactive in informing users about the consequences of having e-filing fees deducted from the federal refund. At the very least, Intuit could have sent customers an e-mail providing that information before the April 15 deadline--instead of apologizing after the fact.
I think it's unfair that Intuit would expect its customers to check its Web site regularly for updated information about TurboTax. After all, every time you start the TurboTax software, it can connect to Intuit's servers and update itself automatically. I did my taxes several weeks after Intuit posted about this matter on its site, so why couldn't the company set the software to inform me about the issue?
At this writing, neither Intuit nor the IRS has clearly explained to me why people who paid their e-filing fees using a credit card haven't encountered the same headaches as people who had the e-file fee deducted from their refund.
Hindsight is 20/20, Miller says. "If we knew then what we know [now], yes, we would have done things differently," she admits.
Let's hope that tax-software companies and the government both get their act together the next time an economic-stimulus package comes along.
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