The Internal Revenue Service won’t charge people who received an economic stimulus payment on a prepaid debit card in the mail and threw it away because they thought the envelope was junk mail.
The IRS began sending an estimated 4 million economic impact payments on prepaid debit cards last month to people who didn’t have direct deposit information on file with the agency (see story). The IRS had problems with many of the direct deposits since some accounts on file were temporary ones set up by tax prep chains for refund transfers and were no longer active. Other stimulus payments had been deposited in the accounts of deceased or incarcerated taxpayers, or others who lived abroad and didn’t qualify. Under the $2.2 trillion CARES Act that Congress passed in March in response to the economic fallout from the coronavirus pandemic, the IRS and the Treasury have been sending out payments of $1,200 to individual taxpayers, $2,400 to couples, plus an extra $500 for each of their dependent children. An estimated 159 million economic impact payments have been processed.
Peter Keating is an investigative financial journalist who has been reporting complex financial stories for more than 25 years. His work has been published recently by GQ, Inc., National Geographic, New York and Politico.
Keating was a founding member of ESPN’s Investigative Unit, where his longform projects included pioneering work that exposed for the first time how the NFL dealt with brain injuries. At ESPN, Keating was a frequent commentator on Outside the Lines and public speaker, making six appearances at the Sloan Sports Analytics Conference, and was part of teams that won three National Magazine Awards. His work has also earned 10 Journalism Awards from the New York Press Club, as well as Investigative Reporters and Editors, Deadline Club and National Headliner Awards.
Keating has written four national columns: “Numbers” and “The Biz” for ESPN the Magazine (1999-2019), “The New Retirement” for Smart Money (2006-2010) and “The Advocate” for Money (1999-2000). He was the senior writer for politics at George during the 2000 presidential campaign.
Keating lives in Montclair, New Jersey, with his wife Karen, their daughters Ellie and Samantha, and their dog, Otis.
Betsy Branagan leads the reserving and claim analytics function at Xceedance. She has over 30 years of experience in traditional actuarial roles of reserving and pricing as well as expertise in leadership, strategy, data management and organizational change.
Prior to joining Xceedance, Betsy held the position as the Appointed Actuary for Plymouth Rock Assurance Company. She managed the loss reserving and pricing functions, led the integration of data from acquired entities, and implemented new reserving tools and processes. Betsy has held leadership roles at Hanover Insurance Group, Arbella Mutual Insurance Company, AIPSO, and on a number of industry committees.
Betsy is a Fellow of the Casualty Actuarial Society and a Member of the American Academy of Actuaries. She holds a master’s degree in business administration from Indiana State University’s Kelley School of Business and a bachelor’s degree in Mathematics from Clark University.
Ross Delston is a lawyer, expert witness and former banking regulator specializing in AML matters.
The agency had hoped the prepaid debit cards would be more convenient than paper checks for sending the economic impact payments. Taxpayers can use the so-called EIP Cards to make purchases, get cash from in-network ATMs, and transfer funds to their personal bank account without incurring any fees.
The IRS and the Treasury Department partnered with a private company, MetaBank, to send out the debit cards, MetaBank was already part of an existing debit card program operated by the Treasury. But the debit cards didn’t go out in the usual Treasury Department envelopes that taxpayers who receive their tax refunds through paper checks are accustomed to seeing. Instead the envelope seemed to come from an unfamiliar entity called “Money Network Cardholder Services” and many people apparently tossed it in the trash, thinking it was junk mail, not realizing the contents could be worth thousands of dollars.
In an email to tax professionals Monday, the IRS said individuals who have lost or destroyed their EIP Card can request a free replacement through MetaBank’s customer service department. The standard fee of $7.50 will be waived for the first reissuance of any EIP Card. The company has also increased the limit on ACH transfers to a bank account from $1,000 to $2,500 per transaction
In an entry added last week to the IRS FAQ page about the economic stimulus payments, the IRS said any initial reissuance fee charged to a customer from an earlier date will now be reversed. Individuals don’t need to know their card number to ask for a replacement by calling (800) 240-8100 and selecting option 2 from the main menu.
The reason why the envelope says “Money Network Cardholder Services” instead of the Treasury or the IRS or MetaBank is that the EIP Card is sponsored by the Treasury Department’s Bureau of the Fiscal Service and it’s managed by Money Network Financial LLC and issued by Treasury’s financial agent, MetaBank.
The prepaid debit card will arrive in a plain envelope from “Money Network Cardholder Services.” Inside the envelope, the Visa name will appear on the front of the card, while the back of the card has the name of the issuing bank, MetaBank NA. Information included with the card will explain that the card is an EIP card. For more information, visit EIPcard.com.
