MILWAUKEE (CBS 58) – Distributing money to people in need should be basic for the government, but the rollout of stimulus checks has been problematic. Payments have been sent to banks used by tax preparers on behalf of their clients. Those clients fear their money will be delayed.

“I was shocked and disappointed,” said North Carolina resident Felicia Reaves.

She told CBS 58 Investigates how the IRS Get My Payment website showed her stimulus check going to her tax preparer's bank account two weeks ago, an account held by MetaBank. She wrote to us after seeing our story on the topic.

“I just moved into a brand new house, so I was expecting that money to be in my bank account,” said Reaves.

MetaBank told us it was sending the payments back to the IRS, but when Reaves checked the IRS again, it showed her deposit going once again to MetaBank. Reaves shared her disappointment.

“Because of the large amount of money and the amount of people the money is going out to, there’s going to be some complications,” said Reaves.

A MetaBank spokesperson said this shouldn’t have happened again. In a statement the bank said:

“We were very concerned to learn over the weekend that the messaging on the Get My Payment website is now telling customers their payments are scheduled to be distributed back to the same temporary refund transfer accounts at the end of this week (April 24), with no option to take any action. This is NOT the direction that the IRS has given us. We believe the messaging was posted in error and we have communicated as such to the IRS.

We, along with other banks in the industry, are trying to get clarification from the IRS, and requesting changes are made to this update as soon as possible. We will update our customers and partners as soon as we get clarification from the IRS.”

CBS 58 Investigates reached out to the IRS, but a spokesperson declined to answer questions, instead referring us to the IRS frequently asked questions page. At the time, (the week of April 20^th) this topic wasn’t quite addressed, but the IRS has since added this question and answer:

When some taxpayers file their tax return, they may choose an option available from their tax preparer or software provider to help them pay their fees, get their refund more quickly or even load the refund onto a direct debit card.  This group of different products is referred to as refund settlement products. In these situations, taxpayers may:

• Use a banking product to help them complete the tax filing transaction, sometimes referred to as a Refund Anticipation Loan (RAL) or a Refund Anticipation Check (RAC).
• Choose to have their tax refund loaded onto a debit card provided by a variety of groups in the tax and financial communities.  

When you filed your tax return, if you chose a refund settlement product for direct deposit purposes, you may have received a prepaid debit card. In some cases, your Economic Impact Payment may have been directed to the bank account associated with the refund settlement product or prepaid debit card. 

If the refund settlement product or the associated account is closed or no longer active, the bank is required to reject the deposit and return it to the IRS. The “Get My Payment” app will be updated once the returned payment to the IRS is processed. Timing of this process depends on several variables, including when and how the payments are rejected and returned to the IRS, when “Get My Payment” updates, and when taxpayers check the tool. 

Once the returned payment is processed by the IRS, the payment will automatically be mailed to the address on the 2019 or 2018 tax return, or the address on file with the U.S. Postal Service – whichever is more current, and the status in Get My Payment will update accordingly. 

The IRS also noted that there was a reporting error that started showing up in recent days on Get My Payment, which inaccurately indicated rejected payments were being sent back to the same taxpayer account a second time. They are actually being mailed to the taxpayers. The IRS has quickly taken steps to correct this reporting error. Get My Payment will be updated starting Tuesday, April 21 to reflect that the taxpayer’s payment has actually been mailed; not rerouted to a closed bank account.

“We threw the gauntlet down and said we want you to get the payments to people,” said U.S. Representative Gwen Moore (D-Milwaukee).

Moore sits on the House Ways and Means Committee, which oversees the IRS. The IRS’ budget has been cut 20 percent over a decade, and Moore said she’s aware of problems at the agency.

“We’ve had several hearings where the department has talked about the woeful inadequacy of every single department of the IRS,” said Moore.

Still, Moore said the IRS is the agency most able to process these economic stimulus payments. For people like Reaves though, every snag along the way has sapped her patience.

“I wasn’t expecting to have any problems getting the stimulus check, the emergency money, especially because it’s an emergency,” said Reaves.

CBS 58 Investigates reached out to other banks who had the same issue. Republic Bank in Kentucky said it took the stimulus payments and cut checks directly to the people who were supposed to receive them.