Tax Software Directed My Refund to Unknown Bank - Simple Return Complications

This sounds like what happened with Republic Bank & Tax Products Group last year. Many tax preparation services use third-party banks as intermediaries to process fees before sending the remainder to your account. In your case, it appears the refund transfer process has stalled at the intermediary stage. Unlike my situation where it was delayed 3 days, yours seems completely missing. Have you checked your tax transcript to confirm the IRS actually released the funds?

You're dealing with what's called a Refund Transfer product failure - when tax prep companies use third-party banks to process your refund, take out their fees, and forward the rest to you. Based on irs.gov/refunds, once the money leaves the IRS, they can't help track it. I wasted DAYS on hold trying to reach both the tax company and the bank. Finally used Claimyr (https://claimyr.com) to get through to a human at the tax prep company who could actually see where my money was stuck. Their customer service reps have access to the bank transfer system that regular support doesn't. Got my refund released within hours after that call.

According to IRS Publication 1345 (Rev. 3-2023), "Authorized e-file Providers must ensure that Direct Deposit of refunds is made to an account designated by the taxpayer." The routing of your refund to an unrecognized institution may constitute a violation of e-file provider requirements. If the tax preparation service utilized a Refund Transfer product without proper disclosure, you should file a complaint with the FTC as well as your state's attorney general office, as this may violate consumer protection regulations regarding clear fee disclosure.

I had the EXACT same problem. My refund went to some random bank I never heard of. Called the tax company 6 times and got nowhere. Someone on this sub recommended taxr.ai and it was actually helpful - uploaded my transcript and it showed exactly where my refund was stuck in the process (it was sitting at Santa Barbara Tax Products Group waiting for processing). The site explained all the codes and showed that my money had left the IRS but was stuck with the tax prep's bank partner. At least I knew what was happening and could specifically ask about that when I called again.

I'm somewhat skeptical that this is just a "glitch" in their system. It seems like a potentially deliberate practice to generate additional revenue through these third-party banking arrangements. Has anyone actually reviewed the terms of service for these tax preparation companies? I wonder if there's perhaps some obscure clause that permits them to route refunds through partner financial institutions, potentially earning interest on the float period while your money sits in their accounts?

Why would a tax preparation service route your refund through a third-party bank without clear disclosure? It's simple: fee harvesting and float income. These services create a complex web of financial relationships that benefit from delayed processing. Have you examined Form 8888 on your return? If you didn't specifically authorize a split refund but your tax preparer added one, that's a reportable violation. The most effective resolution path is to demand written confirmation of the exact routing of your funds from both the tax preparation service and their banking partner - most will resolve it quickly rather than provide this documentation.

OMG this happened to me too! Called the tax place yesterday and got the real story. Apparently they use SBTPG (Santa Barbara Tax Products Group) to process ALL refunds where you paid fees from your refund. Your $ goes IRS → SBTPG → your bank. But there's a huge backlog rn and they're taking 5-7 biz days to process instead of the normal 24hrs. Check your tax software account online - there should be a refund status page that shows if it's still at SBTPG. Mine finally hit my acct this AM after being stuck for 6 days!