This glitch could effect millions who are expecting their tax rebate checks, to not receive them until possibly late July.

One of the main problems is tax payers who took out a RAL (refund anticipation loans) and also some tax payers who allowed their tax preparer to take the fees right from their refund.

When a person gets a RAL the bank sets up a temporary bank account for the tax payer. Then when the IRS approves the tax payer’s refund the bank sends the tax payer their money minus the RAL fees. When the bank receives the refund from the IRS they then move the money to their own account and close the temporary account.

Well, since the IRS is paying the Rebates via direct deposit (for those who used direct deposit of their refunds) the IRS sent the rebates to millions of closed bank accounts.

The IRS prior to April 15th made a few statements regarding who could and could not use direct deposit, but failed to provide details on the refund anticipation loan issue until May 7!

The glitch is due to a technical problem, according to major tax preparation firms and the major tax preparers say the government is to blame for taxpayers’ confusion.

“The IRS decided how people were going to get paid,” said Nancy Mays, an H&R Block spokesperson. “This is not in any way an H&R Block issue.”

At TurboTax.com, the software company noted the economic stimulus program became law Feb. 13 and the IRS only announced its rebate schedule in mid-March.

“My expectation is for folks who filed early, in late January or the mid-February time frame, they would not have known. We would not have known,” said Julie Miller, a spokesperson for Intuit Inc, the company that produces TurboTax.

Anyone who used TurboTax’s Refund Transfer service will have to wait for a paper check.

Other issues are that tax payers did not receive the right rebate amounts. Some are missing the $300 per child while others didn’t get the $1,200 for married couples.

Some of our customers here at FlieYourTaxesNow.com have reported that they have received their rebate checks OK, while others are still waiting.

Read more at the IRS Frequently Asked Questions. You can also call the Tax Rebate Hot Line number at 866-234-2942, be prepared to wait on the line for a long time.

Faced with a deluge of phone calls, the IRS is urging taxpayers to go to its Web site, www.irs.gov, for more information. ”We encourage people to be as patient as they can,” Lemons says. “Calling on the phone won’t help people get their payments any quicker.”

Do not be alarmed if you did not get your rebate today, the IRS will be sending them out in batches. Refer to the chart here (scroll down – sorry theme problems) to see the expected date of your tax rebate based on the last two digits of your SSN.

“Starting Monday, the effects of the stimulus will begin to reach millions of households across our country,” Bush said Friday in remarks on the South Lawn of the White House.

My Poll on this website shows that most people will be using their rebates to pay bills and the AP reports that most of your tax rebates will go toward gas prices since the price is expected to hit $4 a gallon soon. Ouch!!

Step 1 – Get all your tax information together! – You’ll save time and won’t have to stop in the middle of preparing your current year tax return to find a missing document.

Here is what you will need :

• Social Security numbers for yourself, your spouse, and any dependents.
• Forms W-2 from all employers are required for yourself and your spouse.
• Forms 1099 for Dividends, Retirement, or other income, or any Forms 1099 with Income Tax Withholding.
• Receipts for expenses for Itemized Deductions (Schedule A).
• Receipts and records for other income or expenses.
• Bank Account numbers (for a fast refund, or to pay electronically).
• Prior year Adjusted Gross Income amount or prior year PIN if using a Self-Select PIN as your signature.
• Complete information on what records you need, and how long to keep your records.

Step 2 – Choose the method of e-filing that works for you:

• Tax Professional
• Personal Computer

Step 3 – e-file it!

Paid Preparer – If using a Tax Preparer, be sure to take all your information with you, and don’t forget to ask for IRS e-file!
Personal Computer – Those filing taxes online, just answer the simple questions in our tax preparation software here at Da Kine Taxes, and the software will do the rest for you. For faster refunds, or to pay when YOU want to, have your bank account number handy.

Relax. You’re done. Now SHARE – tell a family member or friend IRS e-file is the smart way to electronically file their federal and state income tax returns!