IRS Seeks to Return $266 Million in Undeliverable Refunds And Economic Stimulus Payments to Taxpayers

WASHINGTON — The Internal Revenue Service is looking for taxpayers who are missing more than 279,000 economic stimulus checks totaling about $163 million and more than 104,000 regular refund checks totaling about $103 million that were returned by the U.S. Postal Service due to mailing address errors.

“People across the country are missing tax refunds and stimulus checks. We want to get this money into the hands of taxpayers where it belongs,” said IRS Commissioner Doug Shulman. “We are committed to making the process as easy as possible for taxpayers to update their addresses with the IRS and get their checks.”

IRS Seeks to Return $266 Million in Undeliverable Refunds And Economic Stimulus Payments to Taxpayers

All a taxpayer has to do is update his or her address once. The IRS will then send out all checks due.

Stimulus Checks

It is crucial that taxpayers who may be due a stimulus check update their addresses with the IRS by Nov. 28, 2008. By law, economic stimulus checks must be sent out by Dec. 31 of this year. The undeliverable economic stimulus checks average $583.

The “Where’s My Stimulus Payment?” tool on this Web site is the quickest and easiest way for a taxpayer to check the status of a stimulus check and receive instructions on how to update his or her address. Taxpayers without internet access should call 1-866-234-2942.

Regular Refunds

The regular refund checks that were returned to the IRS average $988. These checks are resent as soon as taxpayers update their address.

Taxpayers can update their addresses with the “Where’s My Refund?” tool on this Web site. It enables taxpayers to check the status of their refunds. A taxpayer must submit his or her social security number, filing status and amount of refund shown on their 2007 return. The tool will provide the status of their refund and in some cases provide instructions on how to resolve delivery problems.

Taxpayers checking on a refund over the phone will be given instructions on how to update their addresses. Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.


Taxpayers not sure of which type of check they may be due should check on a potential economic stimulus check first because of the looming deadline. See instructions above.

For Most People

The vast majority of checks mailed out by the IRS reach their rightful owner every year. Only a very small percent are returned by the U.S. Postal Service as undeliverable.

Through September 2008, the government distributed 116 million economic stimulus payments with only about 279,000 checks being undeliverable. Meanwhile, the IRS has distributed more than 105 million regular refunds this year with only about 104,000 being undeliverable. In both cases, well under one percent of refunds or stimulus checks were undeliverable.

Avoiding Future Problems

The IRS encourages taxpayers to choose direct deposit when they file their return because it puts an end to lost, stolen or undeliverable checks. Taxpayers can receive refunds directly into personal checking or savings accounts. Direct deposit is available for filers of both paper and electronic returns.

The IRS also encourages taxpayers to file their tax returns electronically because e-file eliminates the risk of lost paper returns. E-file also reduces errors and speeds up refunds.

Tax Rebate Problems

Some glitches in the system caused a lot of 2008 tax rebate (stimulus) checks to be sent to the wrong bank accounts.

This glitch could effect millions who are expecting their tax rebate checks, to not receive them until possibly late July.

One of the main problems is tax payers who took out a RAL (refund anticipation loans) and also some tax payers who allowed their tax preparer to take the fees right from their refund.

When a person gets a RAL the bank sets up a temporary bank account for the tax payer. Then when the IRS approves the tax payer’s refund the bank sends the tax payer their money minus the RAL fees. When the bank receives the refund from the IRS they then move the money to their own account and close the temporary account.

Well, since the IRS is paying the Rebates via direct deposit (for those who used direct deposit of their refunds) the IRS sent the rebates to millions of closed bank accounts.


Tax Rebate Problems

The IRS prior to April 15th made a few statements regarding who could and could not use direct deposit, but failed to provide details on the refund anticipation loan issue until May 7!

The glitch is due to a technical problem, according to major tax preparation firms and the major tax preparers say the government is to blame for taxpayers’ confusion.

“The IRS decided how people were going to get paid,” said Nancy Mays, an H&R Block spokesperson. “This is not in any way an H&R Block issue.”

At, the software company noted the economic stimulus program became law Feb. 13 and the IRS only announced its rebate schedule in mid-March.

“My expectation is for folks who filed early, in late January or the mid-February time frame, they would not have known. We would not have known,” said Julie Miller, a spokesperson for Intuit Inc, the company that produces TurboTax.

Anyone who used TurboTax’s Refund Transfer service will have to wait for a paper check.

Other issues are that tax payers did not receive the right rebate amounts. Some are missing the $300 per child while others didn’t get the $1,200 for married couples.

Some of our customers here at have reported that they have received their rebate checks OK, while others are still waiting.

Read more at the IRS Frequently Asked Questions. You can also call the Tax Rebate Hot Line number at 866-234-2942, be prepared to wait on the line for a long time.

Faced with a deluge of phone calls, the IRS is urging taxpayers to go to its Web site,, for more information. ”We encourage people to be as patient as they can,” Lemons says. “Calling on the phone won’t help people get their payments any quicker.

2008 Tax Rebates Start Going Out Early

Some tax filers who used direct deposit for their refunds saw their tax rebate deposited into their accounts today. This is early as the IRS stated that the rebates would not be sent out until Friday May 2nd.

Do not be alarmed if you did not get your rebate today, the IRS will be sending them out in batches. Refer to the chart here (scroll down – sorry theme problems) to see the expected date of your tax rebate based on the last two digits of your SSN.

“Starting Monday, the effects of the stimulus will begin to reach millions of households across our country,” Bush said Friday in remarks on the South Lawn of the White House.

My Poll on this website shows that most people will be using their rebates to pay bills and the AP reports that most of your tax rebates will go toward gas prices since the price is expected to hit $4 a gallon soon. Ouch!!

How to efile taxes online

How to efile taxes online?

Step 1 – Get all your tax information together! – You’ll save time and won’t have to stop in the middle of preparing your current year tax return to find a missing document.

Here is what you will need to eFile a Tax Return Online with the IRS using online software to prepare taxes:

  • Social Security numbers for yourself, your spouse, and any dependents.
  • Forms W-2 from all employers are required for yourself and your spouse.
  • Forms 1099 for Dividends, Retirement, or other income, or any Forms 1099 with Income Tax Withholding.
  • Receipts for expenses for Itemized Deductions (Schedule A).
  • Receipts and records for other income or expenses.
  • Bank Account numbers (for a fast refund, or to pay electronically).
  • Prior year Adjusted Gross Income amount or prior year PIN if using a Self-Select PIN as your signature.
  • Complete information on what records you need, and how long to keep your records.

Step 2 – Choose the method of e-filing that works for you:

  • Tax Professional
  • Personal Computer

Step 3 – e-file it!

Paid Preparer – If using a Tax Preparer, be sure to take all your information with you, and don’t forget to ask for IRS e-file!
Personal Computer – Those filing taxes online, just answer the simple questions in our tax preparation software here at File Your Taxes Now, and the software will do the rest for you. For faster refunds, or to pay when YOU want to, have your bank account number handy.


Common Features of Software and Online Products that Allow for eFile:

  • Easy-to-understand online interview
  • No income restrictions
  • Supports every filing status
  • Selects the right federal income tax form for you: 1040EZ, 1040A, 1040
  • Calculates capital gain distributions
  • Claim tax credits
  • Claim deductions for IRA contributions, student loan interest, school tuition and fees, etc.
  • Claim itemized deductions
  • Detects and calculates Child Tax Credit
  • Detects and calculates Earned Income Credit (EIC)
  • Report self-employment income
  • Report small business income
  • Report income from sale of a property
  • Error and omission checking (100% accuracy guaranteed)
  • Fast direct bank refund deposit (requires bank account)
  • Pay later – deduct fee from refund (small fee applies)
  • efile for an extension by April 15, 2015
  • Print your completed and IRS accepted return

There is no need for you to select a tax form; it’s all done by the online tax preparation software. If you need a tax form that is not currently accepted online by the IRS, you can still complete and efile your federal tax return.  Relax. You’re done. Now SHARE – tell a family member or friend IRS e-file is the smart way to electronically file their federal and state income tax returns!