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I assume this is done by the company, not the IRS.

But where is the company getting the refund from?

In the US it's legal for the person filing the taxes on behalf of another person to collect the refund for them.

This allows tax prep companies to give people 'instant refunds' (essentially loans for the expected refund amount) so people don't have to wait weeks for the IRS to send them a check in the mail.

The IRS only pays out via check or direct deposit but the company who did your taxes can pay out in cash, gold, or pokemon cards if they want to.

It's also awesome how the tax prep companies can advertise the cost as nothing, because you'll make it up in your refund. And they'll happily let you pay for their service using the refund.

So much fun :)

I think its usually like a person is due to receive a $1,000 refund and the company they did their taxes through will give them the offer to immediately get an Amazon gift card for $800 instead of waiting for fed and state refunds to hit their bank accounts.

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