The Internal Revenue Service (IRS) has announced that it has changed its position, and will reissue some Economic Impact Payments that had been mistakenly sent to tax preparers and were returned by those tax preparers to the IRS per IRS instruction.

The IRS has changed its policy on EIP2 payments by ACH that were mistakenly sent to tax preparer accounts. The IRS now says that if a tax preparer is able to identify the final, ultimate bank account of the intended recipient, it can move the money to that account instead of returning the funds to IRS. This is a change from the prior information which stated that in such cases the funds must be returned to the IRS. The IRS says that it is already aware of organizations and tax practitioners that are “forwarding” the funds from these erroneous EIP2s. Some RDFIs have already started to receive EIP2 ACH credits being sent from tax preparation companies.

Nacha has learned that the IRS has made a large error in the issuance of Economic Impact Payments (EIPs).

The IRS and the U.S. Treasury have confirmed that 113 million EIPs by ACH are being processed this week, with an effective date of Monday, January 4, 2021. Under the Nacha Rules, RDFIs must make funds available by 9:00 a.m. (RDFI local time) on January 4. The EIPs by ACH will be identified with a Company Name of “IRS TREAS 310” and a Company Entry Description of “XXTAXEIP2”.