Don't Mess With Taxes

This is definitely not what any of us wanted to hear, but Newsday reports that some economic stimulus checks are showing up in the wrong bank accounts.

Although the direct deposit of most of the rebates seem to be going into the appropriate accounts, the Long Island, N.Y., tabloid says some are winding up in the bank accounts of complete strangers.

"We do know of instances of problems; we've heard of situations where stimulus checks have gone to the wrong people's bank accounts," Kevin McKeon, IRS spokesman for the New York region told Newsday. "We're getting a lot of calls to the toll-free number."

The newspaper cites one taxpayer who discovered an unexpected deposit of $1,800 that should have gone to another person's account. The taxpayer who got the unintended tax cash said he contacted the IRS and was told by an agent that the deposit was one of 15,000 misrouted checks sent out incorrectly as a result of a computer programming glitch.

Wrong deposit elsewhere, too: I'm not sure if it's the same glitch, but I do personally know of one instance, not in the New York area, where rebate money was not distributed as it should have been.

A couple (OK, it's a relative and her former spouse who shall remain nameless) was going through a divorce earlier this year and filed their 2007 returns as married filing separately.

Each qualified for some rebate cash. Each sent in separate returns with their respective, different addresses.

And last week, the full amount -- her expected check and his due rebate -- was deposited into the now ex-husband's bank account.

Luckily, the divorce is relatively amicable and he's promised to bring his ex-wife her portion of the rebate money. Not that I don't trust him, but I'm keeping an eye on the situation.

But that shouldn't have happened. I know the IRS had their joint filing info in its database from prior year returns. This year, however, the agency got separate 2007 Form 1040As with specific instructions and that's what the IRS ostensibly was using to dole out the rebate money.

Such sloppiness or computer problems or whatever is just unacceptable.

Follow up if you're still waiting: So if you're wondering about your rebate payment, my best advice is to nag the IRS. Check out the agency's various Web pages, consolidated links found here, or call the IRS toll-free Rebate Hotline at (866) 234-2942.

It might not hurt to let your Representative and Senators know of the problem, too. And if the wait for the money is causing a real hardship, there's always the Taxpayer Advocate Service.

Those receiving misdirected IRS deposits must report the mistake to their bank and paper checks sent to incorrect recipients must be mailed back to the IRS, McKeon told Newsday.

And, he added, any money spent before the recipient is aware of the mistake must be repaid.