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?”
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