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Two
banking industry sources confirmed the error, which will delay
distribution of the badly needed aid.
"For those who don't receive a direct deposit, they should watch
their mail for either a paper check or a prepaid debit card,"
the IRS said in a notice on Thursday.
Intuit TurboTax tweeted on Wednesday: "Unfortunately, because of
an IRS error, millions of payments were sent to the wrong
accounts and some may not have received their stimulus payment."
The IRS did not immediately return a call seeking comment.
One of the sources said the IRS used old information for
millions of accounts that are thought to be closed or inactive.
Banks are working with the IRS to return and re-route the
rejected payments to the correct accounts, but it is not clear
how long this process will take, the person said.
The Treasury Department began processing a second round of
emergency payments on Dec. 29 as part of a new congressional
COVID-19 aid package. As with the first round distributed in
April, millions of payments were to be directly deposited by
Jan. 4 in customer accounts the IRS had on file.
"The IRS determines where second stimulus payments were sent,
and in some cases, money was sent to a different account than
the first stimulus payment last spring," Tweeted H&R Block,
another tax preparation company helping to distribute payments.
Rejected deposits are likely to be reissued as paper checks,
although the IRS may also instruct taxpayers to file their 2020
tax return to claim their payment, the person said.
(Reporting by Michelle Price; Additional reporting by Anirban
Sen in Bengaluru; Editing by Dan Grebler)
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