Did you know......

[FEDUKE404]

Debit not same as deposit

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

This somewhat reinforces my earlier comment. There is a different process in play for deposits versus debits for any given bank account. As an example, for a large credit union in the area, debits are prohibited from any "money market" account and must be from a "checking" account. . .even though the account information for both accounts appears similar. Many savings accounts will not allow debits. Heck, I even know one client who purposely has instructed his bank not to allow **ANY** ACH debits. . .yeah, he writes a lot of checks. . .

FWIW: Is the account you used (for both years) a checking account AND did you get the RTN/DAN numbers from the bottom of a valid check (not from a deposit slip) ??

Hopefully everything will get resolved. But you do need to be aware of these little potential bumps in the road and then navigate around them.

FE

[Burke]

I have some banks (and credit unions) who have changed their RTN's for ACH deposits.

[oceanlovin'ea]

account number change

She uses the same credit union that I use. Last year they added a 1 and some zeros to the beginning of bank accounts. All my online payments still go through without any problems. BUT I asked her to read me what was on the check and it does have the 1 and some zeros...so it is possible that a deposit to the account goes through the same but a transaction to take money out might not go through.

I changed the information that I have in my program to what she read to me so that next year all should be fine.

I always ask them about the account but don't ask to see a check. guess I should start.

Linda, EA

[TAXNJ]

Failure to...

She uses the same credit union that I use. Last year they added a 1 and some zeros to the beginning of bank accounts. All my online payments still go through without any problems. BUT I asked her to read me what was on the check and it does have the 1 and some zeros...so it is possible that a deposit to the account goes through the same but a transaction to take money out might not go through.

I changed the information that I have in my program to what she read to me so that next year all should be fine.

I always ask them about the account but don't ask to see a check. guess I should start.

Linda, EA

Well your post could be a mystery novel or game based on the reply posts. Final chapter showed the tax software and IRS systems worked so can't blame that, the simple answer is:

Failure to proofread before submitting the return

[FEDUKE404]

Verifying bank information

She uses the same credit union that I use. Last year they added a 1 and some zeros to the beginning of bank accounts. All my online payments still go through without any problems. BUT I asked her to read me what was on the check and it does have the 1 and some zeros...so it is possible that a deposit to the account goes through the same but a transaction to take money out might not go through.

I changed the information that I have in my program to what she read to me so that next year all should be fine.

I always ask them about the account but don't ask to see a check. guess I should start.

Linda, EA

Looks as if you got your answer. A credit union I use infrequently will allow over-the-counter withdrawals/deposits when I provide either "my" five- or six-digit account number. Truth be known, to the outside world and its computers, those accounts actually have eleven digits.

As I matter of practice, EVERY year I attach a Word document to the Form 8879 to be returned to me. On it is listed the RTN/DAN and a signature line for the client to certify those numbers ARE correct for any refund deposits or balance due debits. For any upcoming debit dates, those also are shown on the same form with client initials needed. I use that information when the tax returns are efiled. (Some folks do provide a check copy. . .but that is totally optional and unnecessary.) I **DO** request they verify the numbers from an actual check, and not from a bank deposit slip. Works like a top!

FE

[Rapid Robert]

As I matter of practice, EVERY year I attach a Word document to the Form 8879 to be returned to me. On it is listed the RTN/DAN and a signature line for the client to certify those numbers ARE correct for any refund deposits or balance due debits. For any upcoming debit dates, those also are shown on the same form with client initials needed.

Agree. UltraTax generates a bank verification worksheet for both fed and state that I get signed, either paper or e-sign, at same time as 8879 form. Hard for a client to argue you made a mistake when they had to specifically sign off (both spouses for MFJ) on a document stating bank details and amount to be deposited/withdrawn, and nothing else.

Some preparers like their software to have them enter the RTN/DAN twice to avoid typos, but that still won't help if original source is incorrect.

[Burke]

I always ask them about the account but don't ask to see a check. guess I should start.Linda, EA

I think that is a good idea. I get a copy anytime a client changes banks, or the banks/credit unions themselves change their RTN/Acct No's. We caught one this year where that exact same thing happened. They get a letter from the bank,....sigh...but they never read those things. And if they have old checks, the bank still honors them.