Dan Lanciani wrote:
- quote -

Indeed, what ARE we supposed to do? The best we can, that's
what.

My policy has always been not to run a bad check through
again. Client is obligated to bring me cash to redeem it,
plus the 5$ fee my bank charges. Sure maybe one can "run
that copy" through again, but it's too much bother and
besides, I want client on notice that I don't tolerate such
behavior.

And I've never had any bad experience with online payments.
After all, I have a printout (if I even bother to print it
out) with a confirmation number on it. And next month's
statement, e.g from credit card company confirms receipt of
payment also.

When you pay a tax online, whether 940,941,1040, etc, that
is a one time thing, just like giving IRS your bank account
number for direct deposit. They don't just say "hurrah! we
got that sucker's bank account number! Let's save it in
case we need to levy his account in the future. No reason
for them to permanently keep it in your file, since people
change banks, some more frequently than others.

One state agency actually requires merchants to file all
sales tax reports online, and when tax exceeds 750$, the
requirement is to actually pay online.

So we may not be there yet, but headed in that direction.

One other note about cancelled checks. They are not the
absolute proof required by IRS. They accept any reasonable
proof of a transaction and it's payment. In some cases
admittedly, given the demeanor of the one under audit, they
may need to take a harder line, esp when it's apparent that
he's lying.

ChEAr$,
Harlan Lunsford, EA n LA

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Ernie Klein wrote:
- quote -

Heck, no. Bank accounts are very necessary, both for my
business and personal transactions. However these days, the
only business check I have to write is to landlady for
monthly rent. Everything else can be paid online, utility
bills, office supplies, credit cards, taxes..... Even from
personal account, I write very few checks, and consequently
use fewer stamps from USPS.

- quote -

"Spoofing' is another word for forgery, and is in the eye
of the beholder. IOW, if IRS or others has some reason to
think you're lying to them, of course they'll take a hard
line. I dont' think I'll ever have such a problem.

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

If the RO/RA seeks corroborating information directly from
the bank via summons, validation of the information provided
would help root out potential fraudulent efforts.

<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:

- quote -

Are you suggesting that nobody should use banks and checks
anymore? As long as totally paper-trail-less EFT transfers,
check-21 scanned checks that are not legable and so forth
are possible and happen more and more, then anybody that
uses checks can be faced with the impossible task of having
to produce a record where none exists.

Are you sure that the IRS (or others) will accept a web page
printout (which can easly be spoofed) as proof?

--
-Ernie-

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In article <fe4e59$8mg$1[at]panix3.panix.com> , hnslunsford[at]bellsouth.net (Harlan Lunsford) writes:

- quote -

That's not how I understand it is supposed to work. Your
bank should have given you a legal substitute check.
Check21 was not supposed to change the semantics of checks;
just the way they can be transported. (Again, this is
unrelated to ACH dips.)

- quote -

How is it a benefit? You don't have the bad check (or legal
substitute) to use to sue and/or request charges be brought.

- quote -

That doesn't get you a cancelled check to show the IRS,
though. Also, in the event of a dispute with the payee you
are in the position of asking the payee to back up the
evidence that you are correct and the payee is wrong. Of
course, if they were willing to do that then you probably
wouldn't have a dispute.

My experience with trying to use printouts of web
transactions as evidence is that the involved party
dismisses it ("somebody made a mistake/you changed it/etc.")
and third parties (e.g., credit card issuers) ignore it
completely in favor of whatever the involved party says.

IMHO, paying online by allowing the payee to pull money from
your account is the worst possible approach both from a
security standpoint (you have authorized them to access your
bank account) and from a documentation standpoint (the bank
will probably give you the same minimal documentation that
they do for any other ACH dip). Pushing a payment from your
own bank online is slightly better, but I found that my bank
does not stand behind that process either, even when their
own records are clearly self-contradictory.

- quote -

But why would we want to give the IRS access to our bank
accounts? Now if they would take credit cards without a
surcharge...

- quote -

For many years we were told to maintain a paper trail, to
keep our cancelled checks, etc. Now the banking industry is
making it virtually impossible to do this so they can
increase their profit margin. That industry, their
appologists, and the government (who had to enable the
banking industry) say this is all for our own good and that
we suddenly don't need the paper. Yet when there is a
dispute those same people are quick enough to demand the
paper. What are we supposed to do?

Dan Lanciani
ddl[at]danlan.*com

<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

Dan Lanciani wrote:

(snipped....__)

- quote -


Two points here:

1. Today my bank returned a client check due to insufficient
funds. Client was contacted, and he wanted me to run the
check through again. I explained that due to this new
Check21 system, I didn't have the check, so I couldn't run
it through again. Not that I was previously obligated too,
anyway. So maybe there's a benefit. A small one, though.

2. All of this points out the advantages of paying things
online as much as possible. When you do so, you can print
out the confirmation number on the web page provided by the
payee. We can pay 941/940 taxes online, and now we can
even pay our estimated taxes, both federal and state,
online. Thirty years ago there was buzz about a cashless
and checkless society.

As kids in the back seat would ask, "are we there, yet?"

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

AES wrote:
- quote -

Ah so! a credit union. That the one case I mentioned above
which only lists amounts with no copies furnished.

Seems you're at the credit union's mercy in this case as
regards charges for backup paper. Lesson to be learned: use
a regular bank from now on.

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

johndoe[at]nowhere.com (Benjamin Yazersky CPA) writes:

- quote -

In an environment of increasingly aggressive ACH/ARC check
conversion (leaving no cancelled check or image thereof) and
banks that steadfastly refuse to block the associated
unauthorized EFT dips (while providing virtually no data to
the customer showing where the money went), how specifically
is a taxpayer to fulfill that obligation?

- quote -

I can see them taking that position as well (in spite of the
fact that they did not indeed return the checks or copies
thereof). Banks take some pretty wild positions. My bank
constantly tells me that their check archiving "service" is
for my benefit (as opposed to being for their cost savings)
and that I should be ecstatic to be free from the burden of
having instant access to my cancelled checks in my own files
when they can provide copies of any checks I might need (as
long as they aren't too old) on demand for only a small fee.

- quote -

With Regulation E making it easy for payees to entirely
eliminate the cancelled check from the picture, the IRS
should be prohibited from requiring such checks at all.
As I recently discovered, third-party agents can cause
a check to be converted to a TEL transaction (without
imposing any burden of proof/verification on the payee)
rather than an ARC transaction, thus making it impossible
even to show that you started with a check.

N.B. None of the above has anything to do with Check21
(the relatively recent change in banking law) except to
the extent that banks lie and claim that Check21 forces
them to allow unauthorized EFT dips to your account.

Dan Lanciani
ddl[at]danlan.*com

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Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:

- quote -

Stanford Federal Credit Union: No copies of checks
themselves on paper statements, or on online statements,
except by clicking each check number individually and
opening up a window which you can view or download, and
which shows front and back of that individual check.

Not sure how far back this goes -- but some number of months
for sure, probably indefinitely.

<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

<xzebra06[at]aol.com> wrote:

- quote -

Generally speaking, it is the responsibility of the taxpayer
to provide documentation on an audit.

It is the taxpayer's obligation to provide the cancelled
checks etc. I would see the bank taking the position that
the bank returned the checks (or facsmilie copies) with the
bank statements when originally sent. If the taxpayer lost
them, its not the bank's problem & the bank should probably
be entitled to charge for retreiving those images again.

With changes in banking laws in recent years, I think the
IRS should accecpt a facsmilie copy of a check as legal
proof of payment. If the taxpayer's bookeeping is in good
shape, a bank statement showing the amount should suffice.

Even if the IRS were to subpeona, I think the bank would
still have an argument to make to charge for retreiving
copies of checks that are off line.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

<xzebra06[at]aol.com> wrote

- quote -

Banks are not required to provide copies free of charge.

Ask the auditor if the mini-copies will suffice (if those
are available), and see if the bank can get those (10 - 12
per page) at a lower cost.

Talk to the bank about the final bill - in advance. They
might be willing to work the cost down due to the facts and
circumstances. That would depend on the client's
relationship with the bank of course. If you have any pull
there, see if that will help.

If all else fails, see what specific copies they want (front
and back of) and get only the minimum necessary.

- quote -

I doubt it. Then again, is going to court worth the
possibility of "saving" $400 or so?

- quote -

The bank fees are not covered in the Code or Regs.

--
Paul A. Thomas, CPA
Athens, Georgia

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xzebra06[at]aol.com wrote:

- quote -

Does the bank provide absolutely nothing in the monthly
statements? Not even a facsimili of the face of the check?
Come to think of it, I did hear this past year of one bank
which only lists amounts on statement and no photocopies of
checks or deposit slips.

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

I have a case where t/p with return under examination may
have to incur $400 to pay their bank to get copies of
checks, [at] $3 a copy.

Is a bank required to provide copies of checks, free, for an
IRS audit/ examination? or is there some other way to reduce
or eliminate the bank expense for required copies?

If t/p cannot afford to pay for copies of checks, and a
petition is filed to tax court, can the copies then be
subpoenaed at no per-check cost?

Is there an applicable IRC section?

Thanks for any help.

<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >