IRS bungles stimulus rebate payments

If you have your hopes set on a big "economic stimulus" payment arriving in your bank account any day now, you might have to wait a bit longer. The IRS has announced that a subset of taxpayers is affected by a glitch that is delaying rebates sent to them.

The issue affects people who used a service or software program to do their 2007 taxes and opted to have the fee for those services deducted from the stimulus payment and sent via direct deposit. A bug (which the IRS has not elaborated upon) means those payments will now have to be made via a check sent via postal mail.

In addition to this bug, the IRS has confessed that 1,500 checks or direct payments were sent to the wrong taxpayers. While some reports blame this problem on a computer glitch, the IRS says that it can't necessarily pin the issue on a computer problem. Check any payments received carefully to make sure they're actually yours.

If you have received a check or inaccurate (or duplicate) direct deposit, you are required by law to mail the check back to the IRS and/or report the issue to your bank. If you spent the money, you'll have to pay it back as well. 

Finally, the IRS said today that 350,000 households aren't getting properly credited for children in the payments. Makeup checks will be sent out in July.

This isn't the first time the IRS has screwed up rebate payments. In 2001 it sent half a million taxpayers notices of impending rebates (in a similar stimulus/tax relief scheme to what we have this year) that they would never be receiving.

Still haven't gotten your payment? Best not to try calling the IRS, which is now dealing with a reported 2 million incoming phone calls a day. Instead, check the IRS.gov website and consult the payment schedule on this page. And be patient.

UPDATE: The IRS writes to say 1,500 taxpayers are affected, not 15,000.