IRS: Some rebate checks delayed by unanticipated glitch

WBIR-KNOXVILLE, Tenn - Many taxpayers checking their bank accounts for tax rebate stimulus checks should start looking in their mailboxes instead.

Taxpayers and tax preparers are discovering that anyone who elected to have tax preparation fees deducted from their tax refund will not receive rebate checks via direct deposit.

Those who filed their taxes using a software program or service that subtracted a fee directly from the refund will have to wait for their rebate check to arrive in the mail.

Families like the Caprons in Dandridge don't find it easy to take the wait, especially since they were counting on the money.

"We're not supposed to be using our stimulus checks to pay bills apparently, but a lot of Americans are," Danielle Capron said. "We could be evicted from our house tomorrow, if we don't get this check."

Yet they have weeks more to wait. Despite the IRS initially saying they'd receive the stimulus payment no later than May 9, they found out today it's set to arrive in the mailbox by June 6.

The IRS originally announced that those who had tax refunds direct-deposited into their bank accounts would receive rebate checks in the same fashion.

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However, once taxpayers who should have received rebate checks via direct deposit this week started asking questions, the IRS discovered an unanticipated complication.

Tax refund checks routed through a third party bank to allow tax preparation services to deduct their fees prevents the IRS from direct-depositing the rebate check into the taxpayer's individual account.

Instead, they have to mail out those rebate checks the old-fashioned way, meaning delays for many expecting the money.

"We certainly apologize to anyone who was confused by that," IRS spokesperson Dan Boone explained. "The last two times we've done a rebate, we've done it strictly by paper check. This is the first time we've had to deal with this direct deposit issue. We're sort of learning as we go along also."

Boone can't say how many taxpayers will be affected by this situation, but adds, "While I definitely do apologize on behalf of the IRS for any confusion over what would or would not affect direct deposit of stimulus payments, I think from a consumer standpoint this highlights the importance of reading and fully understanding any agreement taxpayers enter into with a tax preparer or software company."

Taxpayers can check the IRS website to see when they can expect their paper checks to go in the mail. At this point, Boone says they are a week ahead of schedule, but that could change.