Receiving fee electronically

[taxtimeagain]

This year I have had numerous requests to collect my fee from the taxpayers refund. I have never carried bank products so I am unsure how this works. Can anyone point me toward information on how this is accomplished in a private practice. Thank you!

[Justataxguy]

I use TaxAct software and they are partnered with 2 banks that offer preparers the ability to have fees taken from the clients refund. I have used the service offered by Advent Financial for the past 3 years. I don't push it on people but it does give me another option if people don't have funds on hand to pay me when their return is ready to be filed. My fee is deducted from the client's refund along with a $27.95 bank fee for the service. The client has the option to either have the balance direct deposited into their bank account, have me print a check when the refund is released, or have it put on a debit Mastercard. My fee is direct deposited into my account. More info available here - http://prep.taxact.com/?sc=

I would think most other tax software companies would have similar arrangements.

The only downside is if the client's refund is taken for back child support, unpaid student loans, etc. Then it could be a problem collecting your fee.

[Koss]

Bank Products

Which software do you use?

BMK

[taxtimeagain]

I am using Taxact. I have quickly looked at the bank products but did not know if there were other options.

[BOB W]

I was talking to someone recently when the subject came up about how much H & R writes off because of lost fees. He said it was a big number every year.

[oceanlovin'ea]

I use TaxslayerPro. I signed up last year for bank products specifically for this purpose. I am not cutting checks or giving out cards. But I can have my fees deducted from their refund. They use their own company which is Taxslayer Financial to process these products.

Whatever software you are using have this option available to you. I suggest you contact your software company and see what their options are.

Linda, EA

[Koss]

Bank Products

I am using Taxact. I have quickly looked at the bank products but did not know if there were other options.

We used TaxACT for many years, and we went through Advent for the bank product. We only had a few clients that wanted this option, but it worked just fine. The fees are kind of stiff, but they get passed on to the client.

The bank products offered by the financial institutions that "partner" with your software are the only options that allow you to collect your fee from the taxpayer's refund. You cannot have any portion of the taxpayer's refund sent directly from the IRS to your bank account. That's a major violation of the preparer regulations.

But you can take a postdated check from the client.

Or, if you accept credit and debit cards, you could, with the client's agreement, collect the client's debit card number, and then process the charge after the refund is deposited to the client's checking account. Someone is probably going to get bent out of shape about this idea, because it involves storing, in your office, not just the card number, but also the authentication data, i.e., the three digit code on the back, and the billing zip code. Without all that data, you can't process the charge without the card present. And storing that kind of sensitive data carries a lot of responsibility. You have to make sure it's encrypted, and you have to get something signed by the client that expressly authorizes you to charge the card at a later date.

But it can be done. There is a right way to do it. Just ask the compliance folks at Target.



BMK

[taxtimeagain]

Thank you for your input Koss. Guess for next year I will look into Advent.

[Justataxguy]

Advent No Longer An Option

Thank you for your input Koss. Guess for next year I will look into Advent.

Just got an email from Advent that they are discontinuing operations and will no longer offer refund settlement and card programs. So I will be be looking for other options.