If the previous post isn't enough here's another thing.

It turns out that millions of people who use tax preparers who offer "Refund Acceptance Loans" or RAL's have their refunds sent to the bank that issued the loans and the only way that can happen is they're required to put that bank's info on their tax return instead of their own personal bank info. This is mostly firms like H&R Block, Liberty Tax, Jackson Hewitt and even Turbo Tax.

Guess where this is going? These stimulus payments are going to the bank that gave them the loan and the bank is using the funds to pay anything outstanding concerning that client including preparer fees. If there's nothing outstanding they're just sitting on that money until they hear from somebody. That part of this is official.

Now, how the hell can this be fixed? Can you imagine all these firms now have to scour their records concerning these loans and manually contact the bank, give them the taxpayer's info and then what? Hope the bank forwards the funds to them? How? Mail a check or what? No idea and good luck with everybody being short staffed and working from home due to the virus.

Some other preparers have their own way of handling refunds and collecting their fees. They'll do the same thing only the preparer is using their bank info on the clients tax return so the stimulus money is going to the preparer. One blog post from an EA said there is no name associated with the deposit. That not official but if that's true now there's an even bigger mess than merely having to deal with a third party bank to have them release the funds to the taxpayer.

Man oh man. I never liked the idea of tax refund loans anyway. My tax software does offer it and I would have to sign up with their affiliate bank. I'm not even remotely interested in that for a variety of reasons.

This is one good reason why.

Bob

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