Everyone’s favorite time of year has arrived! No, I am not talking about Valentine’s
Day. Nor am I referring to the solemn religious
days of Lent, Passover, or Ramadan.
Nope, I am not talking about folks who live for downhill skiing
season. As far as the latter, the older
I get the more I am impatient for the arrival of spring flowers, the return of
the robins, and just plain being able to go outside in shirt sleeves without
bundling up like Quinn the Eskimo.
No, I am talking about tax season! Your favorite time of year! Of course, I am being very sarcastic when I
say that tax season is everyone’s favorite time of year. I suspect that for most people tax season is
a stressful time and a pain in the lower extremities. Some exceptions may apply. I suppose parents of modest income, who
anticipate large refunds because of the earned income tax and child tax credits,
may look forward to their IRS refund to help them catch up on bills. Or maybe their IRS refund will help them come
up with a down payment on a more reliable used vehicle.
The IRS just made tax season a little more challenging this
year for millions. How? Well, last year President Trump signed an
Executive Order concerning payments from federal agencies, and particularly the
IRS this time of year. What did the
President’s Executive Order 14247 require?
The President’s order requires the phase out of paper check
refunds from the IRS. Now, the IRS
states that 94 percent of taxpayers receive their income tax refunds through
direct deposit and they want you to keep doing so. However, the IRS issues more than 100 million
refunds annually. So, 6 percent or six
million or more taxpayers have been receiving paper checks when they get their
refunds.
Taxpayers can still receive paper checks this year, but you
will have to jump through hoops to get a refund the old-fashioned way. According to the IRS, a taxpayer who requests
a paper check refund, “…will then receive a CP53E notice in the mail requesting
a response within 30 days, either to provide banking information or to explain
why such information cannot be provided.”
Trust me, CP53E notices have nothing to do with Star Wars or C3PO.
And don’t we all look forward to receiving notices from the
IRS! I can hear it now: “Oh joy, honey
we got a notice from the IRS in the mail today! I was wondering why our refund
was taking so long.” If you were
looking for a simple way to provide the IRS with your direct deposit
information after you already filed, the Taxpayer Advocate at the IRS states “IRS employees cannot take this information over
the phone or in person.” You will then have
to become familiar with a site like ID.me to sign in online with your IRS
account.
Unless you love receiving notices from the IRS, you may want
to think about what you can do to avoid this stress. The most obvious is to ensure that when you
file your taxes this year you ask for a direct deposit of your IRS federal
refund. (If you just get a paper check
refund from Michigan Treasury and nothing from the IRS, as Bobby McFerrin sang:
“Don’t worry. Be happy.”)
If you do not have a bank account? The Taxpayer Advocate suggests you do one of
the following:
“Taxpayers without bank accounts can still receive federal
payments as the IRS transitions away from paper checks by using prepaid debit
cards, mobile apps, or low-cost banking options. The IRS recommends using
FDIC-insured accounts found at FDIC: GetBanked or MyCreditUnion.gov, or setting up direct deposit with
services like PayPal Debit Mastercard….Prepaid Debit Cards: Many cards, such as
the Walmart MoneyCard or PayPal Debit Mastercard, offer routing and account
numbers for direct deposit.”
Apparently, the President’s Executive Order was issued
because it costs more money for the IRS to issue a paper check than it does to
get a taxpayer a direct deposit refund. There
is nothing wrong with saving taxpayer dollars.
Also, I have read that paper checks are more susceptible to theft than
direct deposit. Maybe that is true.
However, I do wonder if there was a better way to go about
this way of phasing out paper checks.
Maybe somebody should have asked C3PO? May the Force be with you this tax
season. And if not, call your
congressman and ask, “Where’s my refund?”