The IRS evidently had a bit of a programming snafu relative to those taxpayers electing to have their tax prep fees deducted from their refund -- as do many TurboTax users. Oops!! I'm hearing from practitioners all over the country that those impacted are hopping mad. It's an interesting "love-hate" relationship between Intuit and the IRS. They seem to work really hard to cooperate (they NEED each other), yet they seem to pretty regularly stub their collective toes.

The letter that Intuit sent out last week appears after the jump.

Dear Valued Customer,

We want to provide you with the most up–to–date information about the tax rebate to which you may be entitled.

Recently, you may have received a letter from the IRS advising you when to expect your Economic Stimulus Payment (rebate). That IRS letter may have inadvertently left off some important information. Taxpayers who chose to have their tax preparation fees deducted from their federal tax refund will receive their tax rebate in the mail, not via direct deposit.

Our records show that you chose this payment option in TurboTax. As a result, the IRS has determined that you will receive your tax rebate in the mail. This may result in you receiving your rebate on a date later than expected.

This situation, while not unique to TurboTax, is understandably causing some concern and confusion. To help further clarify the situation, below is the most current IRS rebate payment processing schedule, as well as additional resources about the tax rebates.

I hope you find this information helpful. If you still have questions, the best source for the most up-to-date information is www.irs.gov (see the "Rebate Payment Questions" link).

Sincerely,

Bob Meighan
Vice President, TurboTax Customer Advocacy