Stimulus Check - direct deposit link for a client to obtain stimulus check

[Uncle Sam]

I know there is a link that provides the opportunity for a taxpayer who hasn't previously direct deposited tax refunds to now enter the account information for the purpose of a faster receipt of stimulus check.
If you have it readily available please post it here. (I don't expect you to waste time searching). Thanks.

[dtlee]

They announced it would be within weeks, not hours or minutes:

In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

Watch this space: Economic impact payments: What you need to know or this one: Coronavirus Tax Relief

[TAXNJ]

I know there is a link that provides the opportunity for a taxpayer who hasn't previously direct deposited tax refunds to now enter the account information for the purpose of a faster receipt of stimulus check.
If you have it readily available please post it here. (I don't expect you to waste time searching). Thanks.

Also, it might be better that one go to the IRS and US Treasury websites for the latest information since it changes/updated constantly than continuous posts.

[Uncle Sam]

I just learned from my software company that even though you enter the bank data into the software, if the client owes money rather than get a refund - the bank information for getting the stimulus check won't be transmitted. In order to accomplish that, the taxpayer would need to have an electronic payment of the tax balance due. However, if the taxpayer receives Social Security benefits via electronic deposit into the bank account - that would qualify.

[TAXNJ]

I just learned from my software company that even though you enter the bank data into the software, if the client owes money rather than get a refund - the bank information for getting the stimulus check won't be transmitted. In order to accomplish that, the taxpayer would need to have an electronic payment of the tax balance due. However, if the taxpayer receives Social Security benefits via electronic deposit into the bank account - that would qualify.

Will you share the notification they sent you so we can reference and share this information with our clients. Thank you

[Uncle Sam]

From what I understand, yes. I would guess that the reason clients prefer paying by check is not only the proof of payment but the control as to when the payment is made rather than relying on software to automatically pull it - where those who aren't financial minded - may forget to reduce their bank balance.

[Rapid Robert]

I just learned from my software company that even though you enter the bank data into the software, if the client owes money rather than get a refund - the bank information for getting the stimulus check won't be transmitted. In order to accomplish that, the taxpayer would need to have an electronic payment of the tax balance due.

Entering bank information but not using it for a payment or a refund is a null operation. Why would the bank info even be included in the efile if it is not being used? Many things you enter into the software don't get included in the efile data sent to the IRS.

[Rapid Robert]

From what I understand, yes. I would guess that the reason clients prefer paying by check is not only the proof of payment but the control as to when the payment is made rather than relying on software to automatically pull it - where those who aren't financial minded - may forget to reduce their bank balance.

Proof of payment and control are no different with a paper check or EFW. But you are correct on one item, with a scheduled payment some people can't manage to keep track of that. But then, how do they manage to remember to write the check? Seems like the same issue either way.

[edit] with a paper check, I understand there is some additional data supposed to be printed on the back (endorsement) side of the check, such as tax year, tax ID, tax form, etc. In some rare cases, I see how that could make a difference as far as evidence of payment. For the everyday Form 1040 filer, I don't know of any evidence that EFW is a problem.

[Uncle Sam]

Entering bank information but not using it for a payment or a refund is a null operation. Why would the bank info even be included in the efile if it is not being used? Many things you enter "into the software" don't get included in the efile data sent to the IRS.

In your past experience in tax preparation - have you ever encountered a pandemic relief situation like this before?
It only became news about direct deposit of stimulus checks this week. How could any of us have predicted that such a situation would ever arise where it would be advantageous for other than tax refunds?
Those anxious eager-beavers who now wish to provide that information - will now have to wait "weeks" before it's even available.
I can't blame a taxpayer who expects that by listing it in the software (regardless of applicability of the outcome of the return) it would expedite this rebate.

[Rapid Robert]

In your past experience in tax preparation - have you ever encountered a pandemic relief situation like this before?.

No. But I have encountered advance payments of tax credits before, several times in fact this century to date. And even a refund of a telephone excise tax, applicable to many people who were not required to file tax returns.

Meanwhile, I was making several minor edits to my post while you posted yours, in particular about paper checks and proof of payment.

[Rapid Robert]

I can't blame a taxpayer who expects that by listing it in the software (regardless of applicability of the outcome of the return) it would expedite this rebate.

Taxpayer? Aren't you preparing the return?

[dtlee]

This thread is exasperating to read.

• I agree with TAXNJ that it is pointless to provide static information in a thread about a very liquid situation. That is why I did not say, "the ability to give the IRS bank account information online is not yet available" but instead pointed to two IRS websites which will have updated information.
• Regarding "Those anxious eager-beavers who now wish to provide that information - will now have to wait "weeks" before it's even available," all I can say is that a few months ago, we would have been more worried about hackers getting our bank account information by typing it online through a browser with all kinds of keylogging add-ins, but if people want to save a few weeks (or months) the danger of hacking may be worth it to them. I am going to discourage my clients from entering this information online. It is highly likely that the IRS will have already started extracting records for payment by the time they build this website, so taxpayers would be taking a risk of exposing their bank information to hackers without the information ever being used. I realize some people are in dire need, so for them, it may be worth the risk.
• I do not understand surprise when our tax software does not transmit information which is irrelevant to the return and not used. My software allows me to keep dependent information that may be used next year but is not used this year. I would never type, "I just learned that even though you enter the name and social security number of a potential dependent who is not being claimed this year into the software it isn't transmitted." I would never expect the bank debit information to be sent when the taxpayer is paying by check. The IRS specifically does not want it unless there is a Direct Debit. Tax software is also not supposed to send the direct deposit information if a paper check is requested to be mailed. It generally won't send Itemized Deductions if the clients take the Standard Deduction. The surprise should be if the software were to send the information when it is irrelevant to the return, not the other way around.
• Regarding, "I can't blame a taxpayer who expects that by listing it in the software (regardless of applicability of the outcome of the return) it would expedite this rebate." Well, I certainly can.
  • If the taxpayers did this themselves, they should have asked the vendor of their product what they do with the information. If they did this with a tax preparer, the tax preparer should have told them, the information stays with me unless it is being used. Why would they want the IRS to have access to their bank information if it is not being used under normal circumstances? I don't give a store my credit card information unless I want to buy something. Like unused dependents, I keep my client's bank information from year-to-year in the software and only confirm this information if the data is actually being used as part of the filing. I would have a major problem if the bank information I have for clients who have not used it in years were used by the IRS as a guide for where they should deposit the stimulus payment. People get divorced. Banks get taken over. Accounts get closed. Why should I need to verify an account every year if it is not being used?
  • The concept of an epidemic being a different situation is correct. E-filing was set up to handle normal scenarios not pre-planned with a switch the IRS could set to gather more information in an epidemic. The IRS business rules have never required bank information to be shared with the IRS unless they are being used for a direct debit or direct deposit. Those rules have not changed. They have been this way since the first year they introduced these features. I suspect one of the reasons they are creating a "Simple Tax Return" may be that it will be specifically designed to allow people to give the IRS information about non-filers without a filing responsibility who may want to also provide bank information.
• Regarding a taxpayer who does not include bank information with the return but who, "... receives Social Security benefits via electronic deposit into the bank account - that would qualify." like TAXNJ, I would also like to see this official communication saying that the IRS will be doing things this way.
• I do not understand this at all: "I would guess that the reason clients prefer paying by check is not only the proof of payment but the control as to when the payment is made rather than relying on software to automatically pull it."
  • I have clients who e-file on April 15 and specify that date for direct debit. They have to have the same funds in the same account whether they write a check (check kiting can be a misdemeanor or a felony) or authorize direct debit.
  • I do not allow my clients to use this direct debit unless they can convince me that they have the ability to manage their account to handle it. I have one client who pays the federal and state balances due and all of their federal and state estimates this way. They file their returns in early February and schedule the payments to come out on the due dates. They prefer this. They DO have proof that the payments were made, when they were made, and to whom they were made. The money does not just disappear from their account without a trace. The biggest risk they run is if they should need to close or change their account. They would have to cancel all future payments and either use IRS Direct Pay or mail checks. My guess is that they will want me to help them set up Direct Pay.
  • Clients who want "control" also run the risk of forgetting or getting sick or otherwise incapacitated. Everything has risks. Regarding the unreliability of the IRS "software to automatically pull it," in the cases where the IRS computers were a day or two late, no interest was ever charged because of their inability to draw the funds on time. While I have been told unofficially that the IRS does not look at postmarks for the first week after April 15, that doesn't mean they can't if the amount is large enough.

Just my 2¢.

[ATSMAN]

I actually got a call yesterday from a former client about this issue because he had seen on social media some link. I warned him of scammers and go to IRS.GOV when in doubt to double check and use any link provided from that page.

[rbynaker]

[*]I do not understand surprise when our tax software does not transmit information which is irrelevant to the return and not used. My software allows me to keep dependent information that may be used next year but is not used this year. I would never type, "I just learned that even though you enter the name and social security number of a potential dependent who is not being claimed this year into the software it isn't transmitted." I would never expect the bank debit information to be sent when the taxpayer is paying by check. The IRS specifically does not want it unless there is a Direct Debit. Tax software is also not supposed to send the direct deposit information if a paper check is requested to be mailed. It generally won't send Itemized Deductions if the clients take the Standard Deduction. The surprise should be if the software were to send the information when it is irrelevant to the return, not the other way around.

I'm wondering if this is a "generational" thing. When I made the transition from paper filed returns to e-filing (maybe 20 years ago?), I spent a good amount of time reading through the publications and learning what gets transmitted with the return. That's changed somewhat over the years (mostly due to ID theft/fraud prevention steps) but the general concepts grew out of the premise that anything that showed up on the paper return would get transmitted. Anything that did not, would not. Direct deposit info does not show up on a paper return unless there's a refund. So of course it wouldn't get transmitted. The software is a tool to help us prepare a paper return, as a bonus feature, it can also transmit that "paper" return to the IRS, electronically.

But there are whole generations of tax preparers (and taxpayers) who have never filed a paper return. For them I could easily see a perception that tax software is just a portal to the IRS database. I entered this bank info into the "software" so now the IRS must have it. That's not too much of a leap (it's just not a correct one).

So, moral of the story, I do understand the surprise. But it doesn't stop me from shaking my head at it.

Rick

[dtlee]

I'm wondering if this is a "generational" thing.

That may explain it, Rick. I am not the oldest tax preparer I know, but I have been doing this a while and predate e-filing by quite a few years. However, in general the modern-day world is a data world where current-day tax preparers and their clients should have learned that "less is more" when it comes to data.

In the old days, storing an infinite amount of old data was common. Now, for security purposes, I would expect that newer preparers and their clients should understand that sending more data, keeping more data, sharing more data and the like increases the risk of data theft. My engagement letter tells clients that I will maintain data for a minimum and maximum number of years. I am following the guidelines learned from major financial institutions who regularly purge older data where they had once saved it indefinitely.

I have for years told clients to ignore the instructions and put XXX-XX-9999 on the checks for their balances due (where the 9999 are the actual digits). If you look at the instructions for the IT-201-V, New York now agrees with me ("Write on your check or money order the last four digits of your SSN, the tax year, and Income Tax"). Perhaps some day, the IRS will follow suit.

All of us should practice storing and sharing the minimum information required and expect other organizations to do likewise. I bristle at organizations that want information that is not necessary. U.S. may be a youngster, but all of us should be expecting that unneeded information should not be going to our vendors or our governments. I frequently ask my vendor why they are capturing information in their e-file record that is none of their business and is not required for filing a return (nor sent to any government). Data protection is not only our right but our duty.