Wednesday, January 6, 2021

Another smear of Turbotax and H&R Block

MarketWatch opines: Furious TurboTax and H&R Block customers demand their $600 stimulus — IRS says some checks were sent to inactive bank accounts

It's not clear that MarketWatch is furious, but it is echoing allegedly furious customers of  TurboTax and H&R Block. Are MarketWatch or said customers justified in being furious? I think not.

If said customers did not assure that the bank account info they gave to TurboTax and H&R Block was up-to-date (such as the card's expiry date or the bank account changed or closed), then said customers deserve the blame. Not TurboTax nor H&R Block. Nor should the IRS cast blame on TurboTax or H&R Block.

The IRS says it is using the banking information the IRS has on file from those returns filed with TurboTax or H&R Block. "Because of the speed at which the law required the IRS to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or, is or no longer active, or unfamiliar.” In other words, the IRS pretends to be innocent.

Said customers deserve the blame because it is their responsibility to keep their info up to date. TurboTax or H&R Block could send the customers a prompt, but TurboTax or H&R Block should not be held responsible for updating their customers' info. How can either know what the new correct info is? They rely on what the customer supplies them.

WRAL, a television station in North Carolina, also piles all blame on H&R Block, TurboTax, and Chase. Used H&R Block to file your taxes? They probably got your stimulus check. Citing the article:

"Carlos Peppers said he grew concerned when he learned his check was being deposited into a bank account with a number he didn't recognize.

"To me, when I looked at it the first time, it looks like it is fraud," Peppers said.

The account belongs to H&R Block, which Peppers used to file his taxes last year.

Numerous H&R Block and TurboTax customers had their money deposited into a refund transfer account that is usually set up for transferring tax refunds.

"I am kind of heated because I have questions like, 'Why couldn’t y’all deposit this into my account?' because this is taking up my time," Peppers said." END QUOTE

So what likely happened? Peppers had changed his bank info with H&R Block after the first stimulus check. So H&R Block used that updated bank info. However, then Peppers closed or changed that bank account without informing H&R Block about it. So H&R Block used outdated bank info given by Peppers to send the second stimulus payment. The check didn't clear what was supposedly still Pepper's account and landed into an H&R Block account for transferring tax refunds. Then Pepper didn't recognize it as an H&R Block refund transfer account. However, if Pepper had updated his bank account info with H&R Block, the stimulus money would have gone directly to Pepper's bank account like he expected rather the H&R Block refund transfer account!

Update Jan 9.  This story shows the IRS caused the error in many cases. "Customers of many tax preparation companies, including TurboTax, H&R Block, Jackson Hewitt and others, noticed earlier this week that their stimulus checks had been deposited into bank accounts they did not recognize. The companies soon notified taxpayers that the IRS had erroneously deposited the payments into temporary “pass-through” accounts from previous years that customers no longer had access to."

NBC News also blamed the error on the IRS. Despite that, Dem Sen. Ron Wyden couldn't resist a swipe at Republicans. “These difficulties are a symptom of Republicans’ decade-long effort to gut the IRS budget and keep the agency from doing its job,” Wyden said. “I will make improving IRS customer service a key component of our Democratic reforms.”

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