MILWAUKEE - A Milwaukee woman spent months making phone calls, trying to track down her 2020 tax refund. The IRS released her money months ago, so where did it go? Unable to get answers on her own, she sought help from Contact 6.
It wasn’t easy for Amy Seeger to balance her family’s budget waiting on her 2020 tax refund. Her anticipated refund was $8,200.
"I have three kids. With back-to-school supplies, gas, inflation, life in general, it’s a lot of money to be waiting on for a year and a half," said Seeger.
The single mom said she spent hours on hold with the IRS, only to be disconnected.
"My mom was actually the one who was like, ‘Call Contact 6,’" said Seeger.
So what happened to Seeger’s refund?
When a taxpayer files their return directly with the IRS, their refund is sent back directly. Often, the taxpayer opts to get their money by direct deposit. Seeger used the tax-filing program available on FreeTaxUSA’s website. Her refund was sent to a bank called Santa Barbara Tax Products Group (TPG) to deduct her tax preparation fee.
"Trying to get ahold of someone [at TPG] was just a nightmare," said Seeger.
The Better Business Bureau (BBB) has more than 1,200 complaints about TPG and gives it an "F" rating.
TPG’s owner is Green Dot Corporation. A Green Dot spokesperson tells Contact 6 that TPG works with thousands of tax preparation firms across the U.S., large and small. TPG distributed refunds to about 13 million taxpayers during the 2021 tax season.
In response to Contact 6’s emailed questions, a Green Dot spokesperson says, "The refund is typically available in the taxpayer’s bank account as quickly as if the IRS distributed it directly to them. If the taxpayer’s bank account information is entered incorrectly or the bank rejects the deposit, delays can occur."
Green Dot’s spokesperson says that "higher than normal call volumes this tax season … resulted in some taxpayers waiting longer than normal to receive support."
Jason Rose, owner of Acc-u-Rite Tax Service in Milwaukee, says he chooses to not partner with third-party companies.
"Why add a middle person in the mix?" asked Rose.
Rose says these banks can add time to a taxpayer’s wait. His customers pay for their tax services up-front. As for tax preparation websites, Rose warns that the back-end costs can be higher than if the taxpayer pays upfront.
"The ‘free’ is rarely ever free," said Rose.
Rose recommends taxpayers read the fine print before using any tax preparation software and to make the best choice for themselves.
"Depending on the cost, maybe it’s worth it. Maybe you don’t have the money to be able to do the tax return at the moment," said Rose.
Robert Taylor, director of FreeTaxUSA customer support, tells Contact 6, "We are always concerned when one of our customers has a poor experience..."
Taylor says if a customer selects a product with a fee associated with it, they "may be able to pay their FreeTaxUSA bill using some of their refund. A small percentage of our customers select this option."
He also says the "vast majority of those that use this product are very happy."
Seeger says after Contact 6 wrote to TPG on her behalf, she finally got some answers. She also got an apology for her difficulties with customer service.
"You guys really saved us," said Seeger to Contact 6 reporter, Jenna Sachs. "The woman [from TPG] then was great. Knew everything. Knew exactly where my money was."
Seeger learned that after her refund was initially sent to an old bank account, TPG mailed her a check. Seeger says that check never arrived.
Seeger filled out some notarized paperwork stating that she never got the money. Eighteen months later, she finally got her tax refund of $8,220.
"Now, I can get school supplies and I can pay some bills that we are behind on," Seeger told Contact 6.
The IRS tells Contact 6, it "does not control bank, debit, credit card or other financial services companies that may offer services to taxpayers … we do not endorse nor control outside vendors or service providers."
The IRS "recommends that taxpayers do their research and choose wisely when deciding on a tax preparer…"
Green Dot’s responses to Contact 6’s emailed questions
"TPG (Santa Barbara Tax Products Group) is owned by Green Dot Corporation, a digital bank and financial technology company headquartered in Austin, Texas. TPG supports consumers with accessible, value-driven tax-related financial products including Refund Transfer. When a taxpayer opts to use Refund Transfer, they are opting to not pay for tax preparation up front, and agree to have tax preparer fees deducted from their refund once it’s available to them from the IRS. This provides a valuable option for consumers who want that flexibility.
Do the tax preparation services send the refunds to TPG?
No, the IRS sends refunds directly to TPG once they have processed the tax return. TPG then deducts the amount due to the tax preparer, per the taxpayer agreement, and remits the balance to the taxpayer. The refund is typically available in the taxpayer’s bank account as quickly as if the IRS distributed it directly to them. If a taxpayer’s bank information is entered incorrectly or their bank rejects the deposit, delays can occur.
How many tax refunds TPG has distributed to tax filers? And/or, how much money?
Numbers from the 2022 tax season are not yet available, but are disclosed annually in our public filings. For the 2021 tax season, TPG distributed refunds to approximately 13 million taxpayers.
Which tax prep services send refunds to TPG?
TPG works with thousands of tax preparation firms across the U.S., large and small.
What can account for delays in refunds? How long does the process typically take?
On average, taxpayers who file electronically with the IRS receive their federal refund within 21 days. The IRS indicates that taxpayers who file paper tax returns could wait up to six months or longer to receive their refunds. There are certain circumstances that could result in delays, which the IRS details here on its website as a resource for taxpayers.
What advice can you offer filers waiting for money?
- Most importantly, taxpayers should file their tax returns electronically rather than mailing a paper copy to the IRS. This will speed the process, as the IRS reports it may take up to six months for paper filers to receive their refunds.
- Taxpayers should double check all info entered on their return is accurate, particularly their name, birth date, and Social Security number. If opting to have a refund direct deposited into a bank account or card, taxpayers should double check they entered their account number correctly or risk having their refund delayed or deposited into the wrong account.
- Check the IRS "Where’s My Refund" site for refund status updates. Taxpayers should carefully read the information on this site as, in some cases, some form of government debt might be deducted from their refund and in turn they will receive a reduced refund.
Would you like to comment on complaints about filers’ difficulty reaching TPG by phone or email?
TPG experienced higher than normal call volumes this tax season, which unfortunately resulted in some taxpayers waiting longer than normal to receive support. This was due in part to challenges the IRS reported in responding to customer calls, resulting in overflow to our customer service channels. Customer experience and support is a top priority for us, and we are constantly focused on improving and enhancing our customer support and service channels. To that end, this became a key area of investment this tax season, and we significantly increased resources dedicated to our service channels (by over 50% YOY) to better support taxpayers and resolve our customers’ issues more quickly.
Statement from Robert Taylor, director of FreeTaxUSA customer service
"If one of our customers selects a product or products that has a fee associated with it, they may be able to pay their FreeTaxUSA bill using some of their refund. A small percentage of our customers select this option. TPG, a subsidiary of Green Dot Corporation, is the banking partner that we use to provide this service via TPG’s Refund Transfer offering. The vast majority of those that use this product are very happy. Once the IRS processes a taxpayer’s return, TPG receives the funds from the IRS, subtracts the amount owed to FreeTaxUSA, and forwards the remaining balance to the taxpayer. Generally, the taxpayer’s refund is in their bank account just as fast as it would have been if the IRS had sent it directly to them. Whether the refund is coming from the IRS or TPG there are ways it can slow down, that is especially true if the taxpayer’s bank information is entered incorrectly, or their bank rejects the deposit. Our customers that don’t use this service receive their return directly from the IRS. FreeTaxUSA never receives any refund money.
"We offer support to all our customers, and we can reach out to TPG on their behalf if they have questions or concerns."