There's something about TurboTax that doesn't like "kicker" checks. We've blogged here previously about problems that Oregon TurboTax users have had getting that tax preparation software to deal with last year's large Oregon "kicker" refund checks. First, users were complaining that the program had inadvertently (or perhaps even erroneously) donated their Oregon "kickers" to the state school fund. Then we ourselves complained about how hard it was to get this year's TurboTax to report correctly the "kicker" we received last December.

Now the federal "stimulus" payments are making for some mildly unhappy TurboTax customers, and not just in Oregon. Although the IRS has almost finished wiring the stimulus money to taxpayers who got their regular tax refunds electronically, many TurboTax users who e-filed will have to wait for a paper check, which may not arrive for several more weeks. The reason? They availed themselves of too many TurboTax conveniences.

A reader who has found himself in this boat e-mailed us over the weekend to point out his problem. "It took me some digging to find this," he writes, but the situation is described here. According to the official TurboTax site --

Even if you have received or will receive your tax refund by direct deposit to your bank account using Santa Barbara Bank & Trust, the IRS will not do the same for your tax rebate. It will mail your rebate instead.

This situation applies only if you chose, at the time you filed your tax return, to pay your tax preparation or filing fees by having them deducted from your expected refund. The payment arrangement with the bank, which carries an additional fee, offers an alternative to paying with a credit card.

Why can't I have my rebate direct deposited just like my tax refund?

When TurboTax customers decided to pay their tax preparation or filing fees with their refunds, they authorized a bank to set up temporary accounts to be used only to receive their 2007 income tax refunds from the IRS. The temporary bank-account information was transmitted to the IRS along with each tax return.

The IRS sent the refund to the temporary account and the bank then transmitted the tax refund (minus the tax preparation fees) directly to the customer's actual bank account.

Because the IRS does not receive a taxpayer's bank-account number, under this payment method, it cannot match a taxpayer with that taxpayer's regular bank account.

That's why the IRS decided that taxpayers who entered into financial transactions with third parties, such as SBB&T, would get rebates by mail.

Isn't that special?

Even crazier than this turn of events, however, is the fact that people would pay these fees in the first place. We asked the reader how much they were, and he reported:

$29.95 "SBBT Refund Processing Fee"

$35.90 "Electronic Filing Transmission Fee and/or service fee for web users"

People, that's just nuts. Do as we do: Buy TurboTax with a coupon at Costco -- this year, it cost $21.99. File a paper return -- cost of postage, a couple of bucks at most. Get a paper refund check. Walk or bicycle it down to the bank and deposit it -- cost of processing, zero.

To me the larger tragedy here is not the delay in receiving the stimulus payment, which is bad enough. Rather, it's somebody paying TurboTax and its cronies $66 for something that should cost about $1. If you've got a computer, put it to work for you, not against you.