Did you know......

[oceanlovin'ea]

that IRS doesn't begin processing balance due returns until after the first of May? One of my clients called me to tell me her money had not come out of the bank account on 4/15 as it was scheduled to. I first verified the bank information. Then I called IRS. The first lady was not too helpful. She told me it was a problem with my software company and that I should contact them. So I did. They told me the information was sent to IRS correctly and he didn't understand why she told me to call them.
So I called IRS again and got a gentleman. He is the one that told me they don't start processing the balance due returns until after the first of May. They get all the refunds out first. He checked for me and said they had the return and the bank information. The money would come out but it might be 2 or 3 more weeks before it comes out. So he said tell your client to make sure the money stays in the account. Since IRS does have the return in their possession there are no penalties to the client.

In 30 years of doing taxes, I never knew that.....just never came up.

Linda, EA

[Burke]

Well, that's something I was not aware of either. Because it is right on the payment worksheet in your software to indicate the date money is to be withdrawn from the account! And I had more than one which had 4/15/16 or 4/18/16 on them. And I had several I set up for estimated taxes as well, and the first installment draft was due 4/18/16....

[Rapid Robert]

Skeptical

I do believe that the bank record may not show up on the same day as the scheduled withdrawal, but it will within one or two, or maybe a few business days. Some bank sites are lagging a day behind or show "pending" transactions.

This would be like saying the IRS won't cash paper check payments for 2-3 weeks, and we know that is not the case. I'm sure we would have heard of this from other sources after all these years of electronic funds withdrawals, since someone would undoubtedly not had enough money in the account 2-3 weeks later to cover the payment, assuming it had already been taken out. The fact that this is the first time that anyone has heard of this is enough to make it highly suspect.

The processing of the returns is a different matter, on that I can agree. Somewhere I saw a priority listing for IRS. Paper filed returns with balance due are processed last, because they already cashed the check up front. Efiled returns with refunds are first, but that has been tempered in recent years, I hope. Paper filed returns with refunds are near the front of the line. Anyone else have current specifics, please add.

[taxea]

call and ask 10 different IRS employees and you are likely to get 10 different answers.

[Gene V]

My balance due was withdrawn from my bank account right on time, both Federal and State

[Burke]

I would surmise the IRS employee was talking about paper returns which might not get into the computer system in time for the withdrawals to be done. When we e-file returns with this information, it is in there "stat." No reason for delay, unless the return rejects, as there is no human intervention. Assuming the bank acct info was correct, any sort of transmission glitch might have caused the draft to reject on the IRS end and we would never know that. I occasionally hear that someone got a paper check and the refund was not deposited EFT, but cannot determine any reason for it.

[Rapid Robert]

I would surmise the IRS employee was talking about paper returns which might not get into the computer system in time for the withdrawals to be done.

What withdrawals? I don't think you can schedule EFW on a paper filed return.

[Burke]

Maybe not, you are probably right. But my point was, the IRS employee may have gotten confused..... I have a couple of clients I can check with to see if theirs' were done.

[TAXNJ]

Yes, IRS DIRECT

What withdrawals? I don't think you can schedule EFW on a paper filed return.

If client paper filed then an EFW payment can be done separately through the IRS Direct Pay for the applicable tax retun period.

[Rapid Robert]

If client paper filed then an EFW payment can be done separately through the IRS Direct Pay for the applicable tax retun period.

Yes. And is anyone seeing that payments scheduled through DirectPay are being delayed for 2-3 weeks until the return is processed? If not, then I remain skeptical.

[TAXNJ]

If you live near Iowa you may

Yes. And is anyone seeing that payments scheduled through DirectPay are being delayed for 2-3 weeks until the return is processed? If not, then I remain skeptical.

If you live near Iowa you may get an answer by attending the National Taxpayer Advocate Nina E. Olson - Next Public Forum on taxpayer service needs and preferences to be held in Red Oak IA on May 5

[Snaggletooth]

Get You Off the Phone

Linda, I wouldn't say you are wrong, but you talked to two different IRS employees and got two different results. In the last 2-3 years the IRS has had their staff cut but have diverted the cuts to taxpayer service rather than collections. In every case where customer support is understaffed (not necessarily limited to the IRS), the objective is to process as many calls as possible. This is true for everything ranging from the phone company to your tax software.

The scenario gets worse if the customer representative is not held accountable for their answers or actions. I can't think of any environment where this is more true than the IRS. It is not necessarily true for Ocean Linda, but it could very well be that a quick answer just gets you off the phone. Office of Nina Olsen reported last year that the IRS actually hung up on 8 million calls during 2014 filing season. Nothing can get you off the phone faster than that.

[FEDUKE404]

Debits for balances due

I had numerous balance due returns that were efiled during the tax season. Many of those selected a bank debit date of something like April 11th (to allow some wiggle room for verification) and those debits occurred on time.

Along a similar line, due to unexpected (personal) circumstances I had to file several Forms 4868 with balances due. Those payments were all properly debited on the default date of 04/18/2016. (Form 4868 and Form 8878 were involved.)

To the best of my knowledge, it is not possible to paper file a tax return along with a debit request. That is restricted to efiled returns. If that is, in fact, the situation then the date the IRS begins "processing" such 2015 returns is essentially irrelevant.

**IF** the questioned return was efiled and **IF** a bank debit on 04/15/2016 was properly requested, then there is indeed either a software issue and/or data input issue involved. As an aside, some bank accounts will not allow any debits to occur, even with valid RTN/DAN information provided and properly entered into the tax software.

There are several potential problems that need to be resolved. . .but calling the IRS is probably far down the list of solutions I would pursue.

FE

[Burke]

I checked with my clients, and they all were debited just fine on 4/18/16.

[oceanlovin'ea]

crazy!

I was totally shocked and thought it sounded screwy.
Her bank told her it had been rejected. It was the same information that was from last year and their refund went into the bank ok. So I told her to put a check in the mail ASAP.

They will probably get a letter with a penalty on it.

Linda, EA