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direct deposits since some accounts on file were temporary ones set up by tax prep chains for refund transfers and were no longer active.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.
Brian Swanson is a partner at Flashpoint Marketing, a marketing consulting firm that focuses on providing traditional and digital lead generation services exclusively to the accounting profession. In 2008 he joined Flashpoint to lead the development of the firm's digital services practice. Prior to joining Flashpoint, Swanson worked for a Big Four firm assisting with audit practice marketing and development. He has also worked as the director of marketing & business development for a regional accounting firm in the Southeast United States. In 2009 he earned his Master in Business Administration in Finance from Benedictine University. He also holds a Bachelor of Arts in Secondary Education from Northeastern Illinois University. He was the first accounting marketing professional to earn certification from the Search Engine Marketing Professionals Organization in internet marketing and advanced search engine optimization. He is currently a member of the Association of Accounting Marketing and SEMPO.
Jennifer Briggs, CAE, is president and CEO of the Indiana CPA Society. She joined the society staff in 2002 and served as the special projects manager, marketing manager, marketing director, director of member services, vice president of member services, senior vice president and chief operating officer. Before joining the society, Briggs spent three years at KWK Management Group as executive director of five state-wide associations overseeing all activities of the organizations, including education programs, marketing, membership recruitment, and various government relations activities. Prior to that, she worked for the Indiana Apartment Association and for five years at the National Association of Mutual Insurance Companies. Briggs earned a degree in marketing from Marian College and an MBA from Butler University, and is a member of the American Society of Association Executives and the Indiana Society of Association Executives. In 2009, she was awarded the Association Professional of the Year award from ISAE. She has served on the American Society of Association Executives CAE Exam Committee, the AICPA’s Future of Learning Committee and various community boards of directors.
Elizabeth Mitchell is President and CEO of the Pacific Business Group on Health (PBGH), an action-oriented 501c(3) non-profit organization focused on improving health outcomes, experience and affordability for consumers and purchasers across the United States. Mitchell is a transformational healthcare leader whose career has focused on improving health outcomes and affordability.
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.
