Shaheen, Warren Call on CFPB, Federal Reserve and IRS to Investigate Issues Experienced by TurboTax Clients in NH & MA
**Constituents using TurboTax are facing undue delays and fees. Senators Shaheen and Warren urge an investigation into TurboTax’s relationship with Green Dot Bank.**
(Washington, DC) – U.S. Senators Jeanne Shaheen (D-NH) and Elizabeth Warren (D-MA) sent a letter to Consumer Financial Protection Bureau Director Rohit Chopra, Federal Reserve Chairman Jerome Powell and Internal Revenue Service Commissioner Charles Rettig to express concerns regarding the relationship between Intuit TurboTax and Green Dot Bank, which acts as a clearinghouse for the collection of TurboTax filing fees and distribution of tax refunds.
The Senators’ letter comes in response to claims from New Hampshire and Massachusetts constituents who are experiencing systemic challenges after filing tax returns online through TurboTax. These constituents, who chose to have their TurboTax fees deducted from their refunds, have had their refunds erroneously deposited into new accounts at Green Dot Bank without their permission, resulting in undue delays and hardship, with many having still not received their full refunds.
“Numerous taxpayers have reported that they cannot access their tax refunds due to Intuit’s partnership with Green Dot Bank,” wrote the Senators. “While the Internal Revenue Service (IRS) online tool indicates a refund was issued, taxpayers find it difficult or impossible for them to access these funds, as the taxpayer’s own banking institution has no record of it and they have no existing banking relationship with Green Dot Bank.”
When such an event occurs, IRS technical advisors may then send the bank a formal request using Fiscal Service Form 150.1, but as the Senators state in their letter, their staff assisting impacted constituents have found the IRS cannot compel Green Dot Bank to respond to their request, leaving the taxpayer in the dark and unable to obtain any information about next steps. This obstructs residents from gaining access to the tax refund proceeds they are anxiously awaiting and to which they are entitled. To add insult to injury, by the time the taxpayer receives their refund (minus the TurboTax fees owed), the taxpayer may also have had their filing fees subtracted directly by TurboTax from their actual bank account, setting the taxpayer up for another frustrating journey to receive reimbursement of the duplicate charges.
“The outsourcing of vital IRS functions undoubtedly benefits private companies like Intuit and Green Dot Bank, but also leads directly to financial damage and mental anguish for our constituents,” continued the Senators. “We urge the IRS to develop its own simple, free filing service that taxpayers can use if they prefer not to have their refunds diminished by fees, their tax data shared with private companies, and their money whisked into banks they themselves did not choose.”
In addition to elevating these concerns to the CFPB, Federal Reserve and IRS, the Senators also request a briefing for their staff, who handle this type of casework for constituents, on this matter within two weeks.
The full text of the letter can be found here.