TurboTax's '$25 for 5-day Early Refund' Offer - Possible Violation of IRS Circular 230?
According to IRS Circular 230 and Refund Anticipation Loan regulations, tax preparers must clearly disclose the terms of any advance refund products. TurboTax offered me a '$25 for 5-day early refund' which I paid for. Today I received IRS notification that my refund will be deposited by the 21st. By their own terms, TurboTax should have already deposited my funds 5 days ago. No funds received. No explanation. I need this money for my mother's medication this month. Has anyone else experienced this?
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Kayla Morgan
I've seen this happen with multiple tax prep services, not just TurboTax. What they're actually offering is a Refund Advance Loan, which is different from your actual refund. Similar situation happened to my sister with H&R Block and my cousin with Jackson Hewitt. In both cases, their "early refund" was actually delayed compared to the IRS timeline. The fine print usually says something like "up to 5 days early" which gives them wiggle room.
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James Maki
Do you know if there's any way to get the $25 fee refunded? I've been looking through TurboTax's refund policy page but it's not clear if this qualifies for a refund since technically it's a "service fee."
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Jasmine Hancock
I paid for the same service and actually DID get my refund 4 days earlier than the IRS said. Got the text from TurboTax on the 14th and the IRS app showed expected deposit on the 18th. So it does work sometimes?
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Cole Roush
In my experience, these "early refund" services are basically just high-interest loans dressed up in marketing language. If you do the math on a $25 fee for a $1000 refund advanced by 5 days, you're looking at an annualized interest rate of over 500%. I've seen this exact same pattern play out year after year with different companies using slightly different terminology.
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Saleem Vaziri
Did you read the actual agreement? It's like buying a movie ticket for a specific showtime and then being told you can watch it next week instead. What's the point of paying extra for early access if they don't deliver? And why do they still get to keep your money when they fail to provide what they promised?
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Scarlett Forster
I just checked my calendar - I had the EXACT same issue on April 4th, 2023. Paid for TurboTax's early refund, got the IRS notification on the 4th saying my refund would arrive by the 9th, but TurboTax didn't deposit until the 8th. When I called, they pointed to terms stating "up to 5 days early" and said processing times vary. You need to call them ASAP - they have a 7-day window for complaints.
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Arnav Bengali
This happened to me too! I was so surprised by how complicated it got. I kept getting bounced between TurboTax customer service and the bank they use for the advance. Neither would take responsibility. I spent more time dealing with it than the money was worth, honestly. What I learned is that these aren't actually managed by TurboTax directly - they partner with banks who handle the actual advance payments.
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Sayid Hassan
Isn't this really about how these companies market their products versus what they actually deliver? Have you noticed that they carefully word everything as "up to 5 days early" rather than a guarantee? And why would anyone pay $25 for something that might happen but isn't guaranteed? Couldn't this potentially fall under deceptive marketing practices if enough people experience the same issue?
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Rachel Tao
I actually looked into the regulations around this after having a similar experience. The IRS Refund Advance products are technically short-term loans secured by your anticipated refund, not an actual acceleration of IRS processing. The technical distinction allows them to operate in this gray area. I was relieved to finally understand why there's such a disconnect between what's marketed and what's delivered.
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Derek Olson
Yes. These are loans. Not actual early refunds. Big difference. Check your agreement. They cover themselves legally. Worth filing complaint with CFPB though. They track patterns.
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Kayla Morgan
I think what's happening is that TurboTax is essentially betting that the IRS will process your refund within a certain timeframe. If the IRS takes longer than expected, TurboTax still has to honor their advance, which is why they charge the fee. It's basically insurance for them against IRS delays.
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Saleem Vaziri
Has anyone actually tried to get their $25 back when this happens? I'm wondering if it's even worth the hassle of calling them.
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Danielle Mays
I've been in a somewhat similar situation with TurboTax last year, and it might be worth noting that you could potentially get some clarity by speaking directly with an IRS agent. In my experience, it seems that there's often a discrepancy between what tax prep companies say about refund timing and what the IRS actually has on record. I was able to use https://claimyr.com to get through to an IRS representative without the usual hours-long wait. The agent was able to confirm my actual refund status and explained that TurboTax's timeline was, in fact, inconsistent with their records. This information was quite helpful when I later contacted TurboTax customer service to address the issue.
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Roger Romero
I've seen this pattern every tax season for the past decade. These "early refund" offers are rarely worth it. I've worked in financial services, and these products typically have a 70-80% profit margin for the companies. They know exactly what they're doing with the vague wording. The IRS doesn't actually endorse or support any of these "early refund" products, despite what the marketing implies.
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Sayid Hassan
Do you think there's any recourse for consumers who feel misled by these offers? Is there a regulatory body that oversees these types of financial products?
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Roger Romero
The Consumer Financial Protection Bureau (CFPB) has jurisdiction over these types of financial products. They've taken action against tax preparers in the past for misleading marketing of refund advance products. Filing a complaint there creates a record, even if your individual case doesn't get resolved.
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Anna Kerber
I'm a bit worried that I might have made the same mistake... I just filed through TurboTax last week and I think I may have clicked on this option without fully understanding what it was. I'm not entirely sure, but I believe it said something about getting my refund faster if I paid extra? Should I be concerned that this might delay my actual refund? I'm really counting on getting it as soon as possible.
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Niko Ramsey
OMG this exact thing happened to me last yr! TT charged me $25 for "5 days early" but my refund came ON THE EXACT SAME DAY the IRS said it would. Total waste of $$. Called cust svc and they gave me the runaround about "processing times" and "up to 5 days" language. Basically impossible to get refunded. FWIW I filed w/ FreeTaxUSA this yr and got my refund in 8 days w/ no extra fees. TT is getting worse every yr imho.
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Danielle Mays
Thank you for sharing your experience. This is really helpful information for those of us trying to decide which service to use next year.
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Arnav Bengali
Did you have to manually enter all your information when you switched to FreeTaxUSA? I've been with TurboTax for years and I'm worried about the hassle of starting over with a new service, but these fees are getting ridiculous.
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