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IRS Rebates to Begin in 2 Weeks, but Some May Have to Wait Months

Posted on Apr. 3, 2020

Taxpayers with direct deposit information on file with the IRS should see their coronavirus recovery rebate checks in their bank accounts beginning the week of April 13, while others might have to wait up to five months to receive paper checks.

“Our goal is to be able to provide money directly in people’s account as soon as we possibly can,” Sunita Lough, IRS deputy commissioner for services and enforcement, said April 2 on a webinar sponsored by the American Bar Association Section of Taxation.

While Lough was unwilling to be more specific about the timeline, House Ways and Means Committee member Steven Horsford, D-Nev., said in a release that the IRS and Treasury had told the taxwriting committee that the payments would begin being issued April 13. The first checks would go to the 60 million taxpayers with direct deposit information from their 2018 or 2019 tax returns on file with the IRS.

After that, starting the first week of May, the IRS will issue about 5 million paper checks per week to as many as 100 million individuals who don’t have direct deposit information on file, in a process that could take up to 20 weeks to complete, said Horsford.

Those taxpayers could get their payments more quickly by providing their direct deposit information to the IRS on a new app that’s in the works. Lough said the new app will be similar to the popular filing season app Where’s My Refund? by allowing taxpayers to see where their recovery rebate funds are in the disbursement process.

Horsford said he was told that the new portal would open at the end of April or in early May.

Social Security recipients who don’t file tax returns won’t need to file returns to receive their checks, Treasury announced April 1. They should receive the additional money “just as they would their Social Security benefits,” Horsford said.

Other taxpayers who don’t file returns should be able to file a simple tax return, subject to future IRS guidance, to receive their stimulus payments, Horsford said.

As for unbanked taxpayers, Treasury Secretary Steven Mnuchin said the government is working with digital companies and prepaid debit card providers to ensure there are other avenues for those taxpayers get their money quickly.

“This money does people no good if it shows up in four months, and we will deliver on that promise,” Mnuchin said during a White House press briefing on the Trump administration’s coronavirus response. “Quickly is a matter of weeks, not months.”

Corporate Refund Forms

Corporate taxpayers, meanwhile, will need to practice patience when filing Forms 1139, “Corporation Application for Tentative Refund,” Lough said.

Form 1139 will be used by corporations looking to benefit from provisions in the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) that temporarily repeal the 80 percent net operating loss limitation and allow businesses to carry back 2018-2020 losses for up to five years before the year of the loss. But the form cannot be electronically filed and must be filed on paper.

“At this point the primary issue for us is having the ability to find [Forms 1139] in the mail, [because] in some places the mail is not being delivered,” Lough said. Most Forms 1139 are still being delivered to the agency’s Ogden, Utah, processing center — the only service center still open since the IRS issued a work-from-home order to thousands of employees the week of March 23. But like most other workplaces, the Ogden center is operating under conditions of reduced productivity, she said.

“We understand the need for liquidity, and we understand the need for taxpayers to get the refund money,” Lough said. “But we also have to balance it to protect our employees. So we really appreciate the patience.”

Workplace Changes

Social distancing rules require new workplace arrangements, Lough said, adding that IRS operations executives are waging a daily battle to process returns to distribute much-needed refunds while also keeping employees healthy.

“If 100 people were going into the building on an average day when everything was good, we can't do that,” she said. “We have to send a far fewer number of people in. So we're rotating [employees in and out of the workplace], as many other agencies and employers are doing.”

The social distancing rules are also replacing face-to-face interactions with taxpayers under audit and exam with videoconferences and other electronic communications, although Lough added that the IRS isn’t enthusiastic about opening new examinations right now. The agency’s People First Initiative, announced March 25, temporarily suspended most new exams.

The IRS has gone farther out “on the ledge than we have ever gone” in allowing taxpayers to communicate and exchange documents with the agency over unsecured email, Lough said, but she added that it’s up to taxpayers whether to send emails on issues such as extensions of statutes of limitations and agreed assessments. “We want to say over and over again: It is not a secure email, so do not put anything in the subject line or the text of the email,” she added.

Lough suggested that taxpayers send attachments as password-protected zip files, and then call the IRS with the password. “We’ll do the same. We’ll send you a document, we’ll secure-zip it and password-protect it, and we’ll call the taxpayer with the password so they can open it,” she said.

Jonathan Curry contributed to this article.

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