Turns out the IRS left out a few details when telling people that if they received their tax return via direct deposit, they would get the rebate in the same fashion. Not so fast! If you used Turbo Tax Online, you will be receiving a paper check. Same for those that used services like H&R Block Rapid Refund. Because your tax refunds are sent to a bank different than your own first to handle the filing fees, then to your account, the IRS has decided that they would not be able to deposit to your bank.
This sucks for many out there, including me 🙁
From the Turbo Tax website:
What if I paid to file my 2007 taxes with my refund money using Santa Barbara Bank & Trust?
Even if you have received or will receive your tax refund by direct deposit to your bank account via Santa Barbara Bank & Trust, the IRS will not do the same for your tax rebate. It will mail your rebate instead.
This applies only to TurboTax customers who used the “refund transfer” with SBB&T when filing. This service lets you pay for your tax preparation and/or e-filing from your refund proceeds, for an additional fee, rather than use a credit card.
When TurboTax customers chose this payment method, they authorized the bank to set up temporary accounts to be used only to receive their 2007 refunds from the IRS. The IRS sends the refunds to the temporary accounts and the bank transmits them directly to customers.
Because the IRS does not in fact receive taxpayers bank-account numbers under this method, it cannot match taxpayers with their current bank accounts.
That’s why the IRS decided that taxpayers who entered into financial transactions with third parties, such as SBB&T, would get rebates by mail. This also applies to taxpayers who used “refund anticipation loans” or RALs (loans made to tax filers against their expected refunds). TurboTax does not offer RALs.