I don't have experience with direct deposit errors, but I do
know that you need to make sure to follow up with all
involved parties if you discover a banking error.

About five years ago when I was paying multiple bills at the
same time, I accidentally crossed envelopes with my car
payment and another bill. A couple weeks later the other
party returned my car payment check. I corrected the error
by sending them another check.

I waited a couple of days just to cover any mailing delay,
then went to my bank to check on the car payment. The bank
(Norwest at the time) accepted the check which was made out
to another party and was nowhere near the correct amount for
the car payment. I was very surprised that this error was
not caught at the bank. I corrected the problem by handing
over the check the other party had returned to me. They
reclassified the other payment as "extra principal" and
removed late charges.

Everything worked out, but I learned that it is quite
possible for someone to cash a check written to someone
else. Especially if one of those someone's is a bank.

--
Richard

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

This may not be the same thing (and it probably isn't
unique) but a person of my acquaintance always pays his
taxes with a check made out to "Infernal Revenue Service."
They're accepted and cashed every time.

Stu

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Sam Rogers wrote:

- quote -

The IRS doesn't check anything. The bank may check.

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Don't know if the SS #s were verified, as in our case the
account we had listed was no longer active. I'm sure the
IRS does some sort of verification because of the
requirement that a jointly filed return have a joint account
to deposit the refund into.

In our little misbegotten adventure, the bank knew who the
refund was supposed to be sent to, and knew their new
account number, but could do nothing to redirect the
deposit. That turned out to be a costly learning experience
for us (we eventually refunded the filing fee to the
client).

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- quote -

I really should have added that my experience was limited to
Wells Fargo and Citibank.

--
Alan
http://taxtopics.net

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Harlan Lunsford wrote:
- quote -

Unlikely or impossible that they check social security
numbers, but very likely that they match the full name on
the transaction with the full name on the bank account,
which is customary with this type of ACH transaction. It
should bounce because they don't mach.

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- quote -

one reply was.....

- quote -

Explanation is in order. IRS cannot change any figures or
bank numbers because it's not they who are issued the
refund. IRS merely processes the return and then certifies
the refund which then goes to their parent, the U S Treasury
where the refund is issued.

ChEAr$,
Harlan Lunsford, EA n LA
Sat 12 Mar 2005

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- quote -

ahh but they CAN, and do. Of course it took about 20 minutes
phone time with the IRS to clear a similar sanfu up, the
taxpayers' refund was deposited into an account in outstate
area they they never had. Irs sends out a nice form to
claim the refund, but they did mention that 10-12 week
turnaround.

The state of MN was far easier to deal with. Explained
problem and voila, paper check sent in 5 days and bank debit
reversed on the spot...

But then MN has only 3 million e-files to contend with, and
with a $5 fine per return for Paid Preparers sending in
paperfile you can bet we push EF for MN on our clients, or
pass along the $5 fine to them via fee increase!

When you explain to them you have to charge them NOT to do
work, LOL...

Dave

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"RM" <ross.briggs[at]cmich.edu> wrote:

- quote -

I don't know if they _can_, but I do know that they _won't_.
I made the same mistake on a client's return once. There was
no way to rectify it through IRS (or at least none they
would tell me about).

- quote -

I wouldn't bet on that. In the case of my client, the refund
was deposited into the wrong account, despite the mismatch.

--
D.F. Manno
dfm2a3l0t2[at]spymac.com
"The work goes on, the cause endures, the hope still lives
and the dream will never die."

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- quote -

This answer agrees with my experience on this subject. The
bank should reject the funds transfer when the SSA number
and account number don't match.

--
Alan
http://taxtopics.net

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mytax[at]adams.net wrote:

- quote -

Efiling for another preparer is allowed, as long as that
preparer is also an ERO, but for various reasons chooses not
to do the work.

In such a case, if I did it for another ERO, my name and
address would appear nowhere.

ChEAr$,
Harlan Lunsford, EA n LA
Wed 9 Mar 2005

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clj1219[at]aol.com wrote:

- quote -

Carol; are you saying that in your misbegotten adventure,
the bank and IRS actually DID check/verify social security
number(s) on the account?

IMWTK.

ChEAr$,
Harlan Lunsford, EA n LA
Wed 9 Mar 2005

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For the parents' sake, one hopes that they and the daughter
are on friendly terms. <g
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RM wrote:

- quote -

My guess: the bank's spokesman is wrong.

- quote -

Don't count on it!

- quote -

THAT makes the most sense. Both parties should be getting a
check, unfortuately AFTER the xfer fails plus a few weeks!

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- quote -

Not a chance.

- quote -

It will probably be 10-12 weeks before they get the check.
What will happen is the direct deposit will be attempted and
since the SS# and the account # don't match, the bank will
kick it back to the IRS. The IRS will issue a paper check.

Learned from experience on this one. <G> Always, always,
always check the account numbers again before hitting that
"send" button.

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RM wrote:

- quote -

First off, the software vendor is absolutely wrong, cause
when a direct deposit is ready for transfer, they (US
Treasury ) do not match Social security numbers with that on
the bank account.

Next, the people at our own practioners' hotline (plural!)
can do absolutely nothing in this respect. In fact the
people in the efile area of IRS can do absolutely nothing.
It's done.

Just kneel and pray that the 2500$ is actually transferred,
and also that parents have control over their child and the
child will do the right thing.

ChEAr$,
Harlan Lunsford, EA n LA
Tue 8 Mar 2005

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Be careful! Helen said that we (EROs) could not e-file for
other preparers but could for the taxpayers. The Bank
*should* send back the deposit to the IRS and then the IRS
would send the parents a check.

Missy Doyle

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RM wrote:

- quote -

I think they're likely to be correct.

- quote -

Not a chance, IMHO.

- quote -

I don't believe any such check is performed at the IRS end.
It may be at the state end, but I don't know. And the bank
has already told you they won't check. So I put the odds of
that happening at about 50%.

It could be worse - you could have put the money into the
hands of a completely unrelated person, in which case you'd
have to make the client whole (give them their money), then
track down and get the money from the other person.

Phoebe

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I purchased unlimited e-filing and another preparer in town
using the same software does not e-file. For a small fee I
e-filed three returns for her yesterday. The three returns
were for the parents and their two children. They all wanted
direct deposit. I mistakenly put the daughter's bank
account # on the parent's return for direct deposit. They
have the same bank. The parents are getting refunds which
total over $2,500. Of course I recognized my mistake about
two minutes after I e-filed the return!

I called the local bank and they didn't seem to want to help
much...and said the funds would most likely be deposit in
the daughter's account. Do you think the people at the
practitioner's hotline can change the account #s? I called
the software vendor and they said the clients would most
likely get a paper check a few weeks later because the
account # will not match the SS#s on the account. Thanks.

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