Direct Deposit-Account Closed

[zeros]

I had sent client's return in with directions to direct deposit the refunds. They are desperate for money. He informed me tonight that the bank closed out his account. He has another account at the bank, however. I advise him to call the bank to see what they could do and maybe retain those funds and put them in the other account. Has anybody ever called the IRS and corrected it there? Is this possible?

[Burke]

It is not possible to call the IRS and correct it. Sounds like it was a mailed paper return? If it has not processed, they won't be able to find it. If it has processed, the EFT will reject and automatically go to check issue. He'll get it, but later.

[thomtax]

There was a discussion about this last year. As I understand it, if the bank will not handle it, the client has to wait until the money gets back to the Feds and they get it processed. The thing that sticks in my mind was the comment of ten weeks. You might search the threads to see the discussion.

LT

[Lion]

Bank

His only hope is the bank. If they reopen his account until the deposit is made. If they don't reject the deposit but put it in a temporary account or redirect it to his other account. But, so much is done electronically without any real human beings involved. Have him call -- or better yet, show up in person on Monday morning -- his bank to beg them to do something for him. Especially if the bank is the one who closed his account in the first place.

[FEDUKE404]

Just expect a paper check

If the account is closed/invalid, the bank information (RTN/DAN) shown on the tax return will result in NO payment being made.

Most likely the IRS "pings" the account in the first place, and will now revert to a paper check mailed to the client's address shown on the tax return.

If you e-filed, the information is already with the IRS. If you sent a paper return, those forms are rattling around somewhere.

Either way, getting something direct-deposited into the replacement bank account is very unlikely at this time. Too bad the client did not earlier tell you what was going on......

FE

[ChEAr$]

problem?

I'm always reminded of a client one year who when time came for me to designate RTN and account number, client swore up and down it was same as last year. Rather than make him mad and demand to see a check I went ahead and followed his instructions.

A couple of days later he was down at the bank but called me and said: 'About that IRS deposit? We have got a problem." My answer to him was simply "No, WE do not have
a problem."

Come to think of it, that was back when software carried forward to current year bank account information. It doesn't now in recent years.

[zeros]

Drake carries forward the bank info

Drake carries the bank info forward but it has to be entered on a second line. Nice feature actually

[S T]

TaxWorks

Allows us to update last years information and carry forward, or we can enter new info.
At any rate, I verify each year and also have the taxpayer sign a Bank verfication form before efiling.

Sandy

[JohnH]

ATX gives us a checkbox to bring forward last year's info, or we can ignore it and enter new info if it's changed.

Since I don't efile, I always remind the client to double-check their account number before signing & mailing the return if I've entered it for them from their handwritten notes or a canceled check. If they don't give me the info in written form, I just put a sticky note on the return telling them where to enter the info themselves (no giving me the account numbers on the phone).

[FEDUKE404]

Client verifies as well

Allows us to update last years information and carry forward, or we can enter new info.
At any rate, I verify each year and also have the taxpayer sign a Bank verfication form before efiling.

Sandy

ST -

I do exactly the same thing, in the CYA (CMA?) category.

I have a simple document that says your refund/debit will use the following bank, and show the RTN/DAN numbers. Client signs (hopefully verifies!) and I enter or verify from that document only.

It also cuts down on wasted voided checks.

FE