Direct Deposit of client's refund?

[tacks]

Question:

Working single mom does not have a bank account. Can she have the IRS direct deposit her refund in to her single boyfriend's bank account?


Other Info:

This unmarried couple both live and raise their children together. Boyfriend is trustworthy

I am not set up for RALs.

Again, thanks very much. You guys have been wonderful.

[RLymanC]

No Bank Account

NO NO and a thousand time NO.

She need to be named on the account. Hope boy friend is trust worthy

[tacks]

Hi RLyman,

Thank you, thank you and one thousand times thank you.



Seriously, it very useful for my client to know. And i'm better able to advise this nice woman.

[FEDUKE404]

And repeating....

NO NO and a thousand time NO.

She need to be named on the account. Hope boy friend is trust worthy

The answer is, again, NO !!!

Kinda makes you wonder how that "family" filed re head of household, EITC, and similar.......

FE

[oceanlovin'ea]

I know that the majority say that it can't be done. But my daughter's refund went into my account several times. She didn't have a bank account, couldn't have a bank account, but her refund was always deposited in my account.

She was divorced so had a different last name. So there was no connection to her and my account.

It is probably not the best idea but sometimes there is no alternative.

Linda

[FEDUKE404]

Insight

I know that the majority say that it can't be done. But my daughter's refund went into my account several times. She didn't have a bank account, couldn't have a bank account, but her refund was always deposited in my account.

She was divorced so had a different last name. So there was no connection to her and my account.

It is probably not the best idea but sometimes there is no alternative.

Linda

Interesting - I had always heard that at least the SSN on the tax return had to match same on the receiving bank account, as well as a depositor name.

Curious: "couldn't have a bank account" ???

Second curious: Could the preparer be at risk for, at least in theory, "misdirecting" a tax refund deposit???

FE

[tacks]

Second curious: Could the preparer be at risk for, at least in theory, "misdirecting" a tax refund deposit???

I would get something in writing signed by the taxpayer unless i knew them extremely well.

[FEDUKE404]

Of interest

Direct Deposit of Refunds

Taxpayers often elect the Direct Deposit option because it is the fastest way of receiving refunds. Providers must accept any Direct Deposit election to any eligible financial institution designated by the taxpayer. The taxpayer may designate refunds for Direct Deposit to qualified accounts in the taxpayer’s name. Qualified accounts include savings, checking, share draft or consumer asset accounts (for example, IRA or money market accounts). Taxpayers should not request a deposit of their refund to an account that is not in their own name (such as their tax preparer’s own account). The taxpayer may not designate refunds for Direct Deposit to credit card accounts. Qualified accounts are accounts held by financial institutions within the United States and established primarily for personal, family or household purposes. Qualifying institutions may be national banks, state banks (including the District of Columbia and political sub-divisions of the 50 states), savings and loan associations, mutual savings banks and credit unions.

Source: http://www.irs.gov/efile/article/0,,id=205427,00.html

Apparently there may also be some separate state/bank institution issues that come into play, such as how to handle MFJ refunds to a "one-person" account.

FE

[ChEAr$]

I know that the majority say that it can't be done. But my daughter's refund went into my account several times. She didn't have a bank account, couldn't have a bank account, but her refund was always deposited in my account.

She was divorced so had a different last name. So there was no connection to her and my account.

It is probably not the best idea but sometimes there is no alternative.

Linda

it's not a matter of "not the best idea". It's forbidden by treasury regulations.

[dsi]

" The taxpayer may designate refunds for Direct Deposit to qualified accounts [u]in the taxpayer’s name".

I would suggest that the use of the word "MAY" is not the same as the word "MUST"?

[Burke]

Trust me. It is done all the time. They do not match anything. I won't put it on the tax return, however, unless I know it is their account. Just ask anyone who input an account # off by one digit. As long as it is a legitimate number, it will go.

[Bonnie]

May be forbidden but the IRS does not check on names etc on accounts. It's all done electronically and the funds just pass into whatever account is listed. So it may be illegal. But technically it's very possible and like others have said here is done all the time.

[ChEAr$]

May be forbidden but the IRS does not check on names etc on accounts. It's all done electronically and the funds just pass into whatever account is listed. So it may be illegal. But technically it's very possible and like others have said here is done all the time.

It may be done "all the time" in some offices, but never in mine.

And btw, IRS does not make direct deposits to bank accounts. That activity is handled by the Treasury department of which IRS is just a branch.

[Redneck]

New this year

Refund Card. Try this for your client.

[ChEAr$]

Refund Card. Try this for your client.

No way, Jose! (grin