Multiple Accounts Deposit of Refunds

[djack1040]

According to the NATP Sep issue of Taxpro Monthly, "The IRS is ironing out plans to offer taxpayers the option of splitting their tax refund in up to three separate bank accounts. To designate multiple accounts, taxpayers will attach a new Form 8888 (under development) to indicate amounts for each allocation and providing account information".

Source IR-2006-85

The article goes on to say that there are no plans to match the names of account holders to account numbers. Great, now we have two more opportunities to screw up routing numbers.

Could this possibly be an accommodation for the highly touted direct funding of IRA's etc, offered by the leading franchise tax service?

Seems like a waste to me!

[jainen]

only yourself to blame

>>no plans to match the names of account holders to account numbers<<

The IRS has NEVER matched names to numbers--how could it? Do you think the government has a giant database of everybody's bank accounts? Do you think it should?

>>now we have two more opportunities to screw up routing numbers.<<

If your office procedure doesn't include the client verifying the number, you have only yourself to blame.

[sea-tax]

To add to Jainen's post if I may:
Also think of this as an oppotunity to charge an extra 15-20 dollars for this new form. I can tell you that I will give the client a choice one deposit included with the 1040 price or multiple deposit form for an extra $20 bucks. Either way I win.

Also I agree it is my company policy that all clients initial 2nd pg 1040 by direct deposit accunt number to verify that it is infact correct. That way it CYA and if it goes into wrong account client has nobody to blame but themselves.

[DaveO]

If part of the refund could be sent to our account to pay the prep charge it would cut down on the number of people getting a RAL. As I read the new law that is not specifically allowed.

[ecb34691]

Trouble with RAL people is that they don't have bank accounts. And having the prep fees go to your account is probably not going to work because your bank my reject on name mis-match. I know where children have tried to deposit to their parents account and the bank returned the refund to IRS and they reissued as a check. The new CADE process at IRS is really reducing refund time. There were direct deposit refunds issued in 3 days this spring under the limited CADE process.

[taxmandan]

I bet the banks will still reject the deposit to an account where the payee isn't on the account. It's never been the IRS that has that issue, it is the banks that won't accept the deposit.

As for my fees, my RAL bank takes my fee out of the refund and deposits to my account, and sends the balance to the client as a check or deposited into their bank. Don't see any reason for that to change.

Daniel