Direct Deposit Error

[JDW]

Taxpayers direct deposit bank account information was keyed in error on the return (with another clients actual bank account information). The tax return was efiled 2 days ago. Have called the IRS Efile Payments Services department and they were unable to help. Any thoughts on how to correct or cancel the return?
I am monitoing where's my refund to see if they reject the refund and send an actual check, but doubt it will reject since the bank routing and account numbers used are in use by another person. Contacted that person's bank and they do not perform an account number to account name match. Thank you for your assistance.

[ATSMAN]

You need to take couple of steps.

1) Inform the E&O carrier if they require immediate notification after you discover a serious error

2) Inform the client

3) Inform the bank whose routing and account # you used by mistake.

4) If the bank account belongs to one of your clients, inform them in writing that the refund does NOT belong to them and request immediate return and you will pay any bank or postage charges etc.

Item #4 is very important because if they refuse they can be charged with larceny.

[EvenKeelTax]

I'd think if the name on the account does not match the client name the bank would reject the refund deposit and the client would receive a paper refund check from the IRS instead (add about 3 weeks processing time during normal times. Possibly much longer due to Covid19.) Good idea to also do everything ATSMAN recommended.

[Burke]

My experience with this is that the direct deposit will go into the account listed on the tax return IF it actually exists. Luckily, when it happened to me, both taxpayers were my clients, and the one who got it contacted me. We straightened it all out at the bank. Withdrew the funds, and I delivered a check to the correct client. Everybody was happy and no problems. Banks may have gotten a little better about this in recent years, but with EFT you never know. Both were my clients for many years.