Refund Direct Deposit to Different TaxPayer Account

[ed_accountant]

I have prepared both a taxpayer and dependent's return. The taxpayer wants the dependent child's refund direct deposited back to his account.

I am wondering if this will work since the taxpayer name will not match the bank account name nor will social securities match? Will this direct deposit go through? Does the IRS match bank account names to tax returns?

[jainen]

>>Does the IRS match bank account names to tax returns?<<

No, but the bank matches account names to payees. When the bank rejects a deposit, the IRS is supposed to reissue as a paper check. Unfortunately, that can take many months. Meanwhile, your client will surely forget that the whole scheme was his own idea, and blame YOU for screwing up the refund that he needed as soon as possible. So don't screw it up.

[ed_accountant]

Well said. You are so right. Thank you!

[Eli]

Well said. You are so right. Thank you!

I just have the clients call their bank to find out if it is allowed. Some banks do, some don't.

Eli

[Pacun]

I think it is safe to do it. If for ANY reason the bank rejects a direct deposit, the IRS issues a paper check the following Friday. A lot of banks accepts deposits without checking names.

[LindaB]

I have prepared both a taxpayer and dependent's return. The taxpayer wants the dependent child's refund direct deposited back to his account.

I would not do this. Pub. 1345 states that "Refunds may be designated for Direct Deposit to qualified accounts in the taxpayer's name." (And in this quote 'taxpayer' does not mean the parents.)

It also says that if a direct deposit is refused, it may take up to 10 weeks to issue a paper check.