Soldiers should check IRS website to ensure stimulus payment

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DC, UNITED STATES

04.17.2020

Story by Devon Suits 

Defense Media Activity - Army   

WASHINGTON -- Soldiers anticipating a stimulus payment should immediately update their direct deposit information on the Internal Revenue Service's website to avoid possible delays, according to Office of the Judge Advocate General sources.

To quickly provide financial assistance during the COVID-19 outbreak, the IRS has begun to send out economic impact payments to Soldiers and families that filed their 2018 or 2019 returns, said Melissa Halsey, legal assistance policy division chief.

However, Soldiers or families that used commercial tax-filing services to file their return -- and opted to receive a Refund Anticipation Check or Refund Anticipation Loan -- are more at risk of a delay.

Tax-preparation businesses often provide refund anticipation services that allow Soldiers to pay the cost of the tax preparation service out of the Soldier’s refund instead of payment up front, or provide Soldiers with their tax refund early at a cost, officials said.

"It is our understanding that about 70% of Soldiers that use a paid tax preparation service also use a Refund Anticipation Check or Refund Anticipation Loan,” Halsey said. "When someone uses a refund anticipation service, the tax preparation business may set up a temporary bank account."

Herein lies the problem, Halsey said. When the Department of Treasury tries to direct deposit a Soldier's stimulus payment, it gets routed to the bank account on file from their return.

If the account on file is a temporary account because the Soldier used one a refund anticipation products, the payment should not be made to these accounts, OTJAG officials said.

"Right now, we don't think stimulus amounts are paid to these accounts, (because) the IRS recognizes that these accounts are not associated with a taxpayer," Halsey said. “But we are working with the IRS to verify that stimulus payments are not placed into these temporary accounts.”

But if the IRS does not have the correct account information for a Soldier, they will not receive a direct deposit. They should act now to correct the issue on the IRS site, she said.

If a Soldier does not address the problem, the IRS will issue a printed check and mail it to the last known address, which could delay payment further if the Soldier is no longer associated with the on-record residence.

In the future, individuals or families that choose to use refund anticipation services should be careful, officials added. Many of these services include undisclosed fees or high-interest rates -- at times exceeding 200%.

If any Soldier has questions or concerns about their stimulus payment, they can seek assistance at their nearest installation legal assistance office or through the legal assistance website, Halsey said.

(Story was originally posted to the Army News Service website on April 17, 2020 and may be found at https://www.army.mil/article/234715)

• Date Taken: 04.17.2020
• Date Posted: 04.17.2020 16:06
• Story ID: 367728
• Location: DC, US