IRS redirecting, reissuing some EIP2s

The IRS said it is working with the tax-preparation industry to redirect second Economic Impact Payments that for some recipients went to temporary bank accounts established when their 2019 tax returns were filed.

The IRS previously said roughly 13 million in EIP2s went to the temporary accounts and will have to be returned to the agency. In a statement issued Friday, the agency said it is working with the tax industry to redirect the payments to correct accounts for "many" recipients.

In a separate communication, the IRS said that if a tax preparer can identify the intended bank account, it can move the payment there instead of returning the funds to the agency. The IRS said some preparers have already done so.

Additionally, the IRS said on Sunday that it will reissue payments for taxpayers who did not receive the EIP2 because the bank account identified in the agency's records has been closed. This affects taxpayers whose tax preparers followed initial IRS guidance and are now waiting for the IRS to re-process payments related to these accounts.

In Friday's public statement, the IRS also reminded recipients that they can claim the Recovery Rebate Credit when they file their 2020 tax return to receive their stimulus payment. Earlier in the week, the agency encouraged individuals who do not receive the EIP2 to file their 2020 return electronically and claim the credit.

Additional information on the second round of EIPs is available on the IRS's EIP webpage and in ICBA's updated frequently asked questions.