sammy.finkelman[at]relaynet.org wrote:

- quote -

I've never seen it happen. If you have a friendly bank, you
could call them and ask them.

- quote -

I've heard of it happening.

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I believe that's considered to be negotiation of the refund
check. So while you could theoretically do it, a reputable
preparer won't. There are a couple of RAL providers that do
something similar, but IIRC it involves having one direct
deposit which the RAL bank disburses.

Phoebe

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

It seems like a family where there is no joint bank account
can use direct deposit to avoid a check cashing fee,

The Instructions for Line 74 says:

"If you file a joint return and check the box on line 74a
and attach Form 8888 or fill in lines 74b through 74d, you
are allowing your spouse to receive the refund on your
behalf. This cannot be changed later."

Somewhat incoherent language (it is missing the clause "and
your name is not on that account") but it seems to be saying
that that is the legal equivalent of endorsing a check.

But there's more
There are two interesting caveats:

1) "Some financial institutions will not allow a joint
refund to be deposited into an individual account. If the
direct deposit is rejected, a check will be sent instead.The
IRS is not responsible if a financial institution rejects a
direct deposit."

The question then is, how common is this and is it possible
to check? Of course in many cases it might be a no lose
proposition - if the check is rejected well they are no
worse off than they were at teh start.

The second caveat is really interesting:

2) "The IRS is not responsible for a lost refund if you
enter the wrong account information.You can check with your
financial institution to get the correct routing and account
numbers and make sure your deposit will be accepted"

Now a random mistake will probably be to a non-existant
account. But teh more interesting questions is - will such a
deposit - if to a real account - usually be accepted?

And is it legal to do this on purpose.

That is, could a tax preparer arrange to get paid that way?
You can now split the deposit 3 ways. So how about a little
for a tax prepaper?

Is the situation such that:

A) This would be OK with the IRS, but not with most banks

B) It is OK with both the IRS and most banks

c) It is not OK - neither with the IRS nor with most banks -
but the IRS puts in that caution about money being sent to
the wrong account just to take care of all possibilities.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >