USING TWO BANK ACCOUNTS

[GeorgeM]

Can I use my bank account to collect my fee from clients?

[Jack from Ohio]

Can I use my bank account to collect my fee from clients?

NO!  Go directly to jail.  Do not pass go.  Do not collect $200.

 

Strictly prohibited.

[Terry D EA]

I totally agree with Jack. DO NOT do it. If I remember correctly there is a section in circular 230 that address the issue of using tax preparer bank accounts for client refunds. I know this is your fee and not a refund but it certainly would look fishy to have two different amounts of the refund going to two different banks and one of them being yours could cause you to loose your status with the IRS, face penalties, and loose your business.

[kcjenkins]

You can do that through Fee Collect, but not by using the 8888.  

[Kea]

According to a webinar I just watched, IRS has new Direct Deposit limits:
- Can deposit a maximum of  3 tax refunds into 1 account per calendar year

- Only made to accounts in taxpayer's name

 -- cannot deposit into preparer's account as payment for services

 -- cannot use Form 8888 to split between tax payer & tax preparer

 

FWIW, this may be the reason ATX now requests the account holder name on bank info sheet.

[Jack from Ohio]

According to a webinar I just watched, IRS has new Direct Deposit limits:

- Can deposit a maximum of  3 tax refunds into 1 account per calendar year

- Only made to accounts in taxpayer's name

 -- cannot deposit into preparer's account as payment for services

 -- cannot use Form 8888 to split between tax payer & tax preparer

 

FWIW, this may be the reason ATX now requests the account holder name on bank info sheet.

The only required fields are routing and account numbers.  There is NO IRS requirement for the other information.  Not sure the reason ATX put that information in the worksheet.  Too much extra effort.

Edited February 17, 2015 by Jack from Ohio