IRS direct draft for payment

[Zee]

I e-filed for a client that wanted to pay for tax with a draft on 4/15/08. They received a bank statement today, that indicates a "00" draft from the IRS, but the bank was closed for them to ask about the transaction. I haven't processed a direct payment before (most people prefer to wait and send a check), but the ability to direct the drafts on 4/15/08 have changed that.

Has anyone had this happen? Is the bank simply notifying the client that they have received a draft request and indicating "00" until the date of the request (that'd be odd).

I'm not sure what to tell these folks. If the draft isn't exercised on time, I suppose they'll be subject to a late payment penalty? Any suggestions?

Update: I called the IRS e-file refund/payment number to try to determine the status of the draft. After entering the required information, the automated response was a draft in the correct amount is scheduled for 4/15/08. I can't figure out for the life of me why the taxpayer would have seen a zero dollar draft for the IRS on their current bank statement (the withdrawal isn't due until 4/15) and it's 3/31 today.

[thomtax]

Zee, I suspect that this was a test draft to see if the drafting information was correct. When I have set up other banks, etc for transferring money from account to account, there will be a draft transfer for some token amount, such as .01 or .05. When this works, I am then notified that the account is ready for me to make transfers. Since the IRS is only going to make one event, they probably don't need to contact the client. Of course, this is just my guess, not an official statement.:-)

The only direct debit I have had was about 4 years ago and it went fine.

LT

[outwest]

Might be what is called a prenote..

in the ACH (automated clearing house) system, a prenote is a zero dollar transaction sent to confirm the valid routing and account numbers. If memory serves me correctly, it wouldn't show on the bank statement however..

[fliszt]

I have

processed scores of direct debits. Always on April 15th 99.9% of the time. I have never had one go bad and I have never been called by a client wondering about a bank notice of zero draft.

[Possi]

same here

processed scores of direct debits. Always on April 15th 99.9% of the time. I have never had one go bad and I have never been called by a client wondering about a bank notice of zero draft.

ditto that...
~possi

[Peachie]

I just notified IRS to draft my account

I e-filed for a client that wanted to pay for tax with a draft on 4/15/08. They received a bank statement today, that indicates a "00" draft from the IRS, but the bank was closed for them to ask about the transaction. I haven't processed a direct payment before (most people prefer to wait and send a check), but the ability to direct the drafts on 4/15/08 have changed that.
.

I will watch to see if anything happens to my account this week. I have authorized the draft for April 15.

I Have done several drafts for other clients with no problems or complaints. IRS has done it on the date specified. I actually like and have convinced my clients to like it also. I just tell them firmly to be sure the funds are there. In many instances, they are getting larger refunds from the State that will cover the withdrawal.

Peachie

[Zee]

Update:

Client checked with bank today. Indeed, they indicated the "00" IRS debit on their account statement is a "test draft" from the IRS.

[Lion]

Just an observation

I've been getting more and more clients who like the idea of the direct withdrawal for balances due. Travel a lot, post office not handy, don't want to risk being late or mail lost, etc. And, some even want it withdrawn now, instead of waiting until 15 April: small amount, get it over with, so they don't forget what it was, whatever. Younger ones, especially. Those used to paying bills on line anyway. I save printing vouchers, labels for envelopes, envelopes, even paper clips, so it's fine with me.