Wrong bank account number

[J R Sandoval EA]

Those of you who have the experience with a direct deposit going into the wrong bank account what is the easiest way to solve the problem. Just wait until the bank returns the money and IRS sends a paper check or file a claim with the IRS;

Thanks

[MAMalody]

If that bank account number actually exists, the bank will not return the money because they are depositing those funds into the account they have been instructed to make the deposit into. The IRS will be no help because they transmitted the refund per the instructions they received. The best the bank can do is to ask that the errant account owner return the funds. If the account does not exist, it will revert back to the IRS and can be handled through them. I believe they would send out a paper check at that time.

[Jack from Ohio]

The option to accept or reject the deposit lies totally with the bank. Each bank sets its own policies.

Example 1) Bank call the client when the client had closed one account and opened another. After the bank spoke to the client, they allowed the deposit into the new account even though the ACH was for the old account.

Example 2) Bank refused the deposit from spouse filing separately because the account had both names on it.

Example 3) Credit union refued the deposit because it was labeled a checking account instead of a savings account. The only difference between checking acct# and savings acct# was a two digit extension on the account# which was not included on the return. Client was throughly angered because his information about the two digit extension was not on any documents concerning his savings account.

Example 4) Bank re-opened the old account, allowed the deposit, closed the accont, and contacted the client.

One of my clients worked in a Credit Union and a bank and was in charge of the ACH transfers. She told me that the receiving bank has the ability to do any of the things mentioned above. There is a definite pattern to the examples above... Examples 1 & 4 were small hometown banks.

[ILLMAS]

Those of you who have the experience with a direct deposit going into the wrong bank account what is the easiest way to solve the problem. Just wait until the bank returns the money and IRS sends a paper check or file a claim with the IRS;

Thanks

What do you mean by wrong account number? Usually banks don't re-issue same account number to someone else, what I am thinking that happened, and this is very common, client closed account because he/she lost their check book, but didn't inform you, or they just simply changed bank. In this case, the would attempt submiting the refund twice, if the ACH is returned, then the IRS will mail them a check. I had a client who didn't inform me about the close account, it them 3 months to get the check by mail.

[Jack from Ohio]

What do you mean by wrong account number? Usually banks don't re-issue same account number to someone else, what I am thinking that happened, and this is very common, client closed account because he/she lost their check book, but didn't inform you, or they just simply changed bank. In this case, the would attempt submiting the refund twice, if the ACH is returned, then the IRS will mail them a check. I had a client who didn't inform me about the close account, it them 3 months to get the check by mail.

I find it difficult to believe that you have clients that don't give you certain information that is important to their return...

I have never heard of such a thing.... :dunno:

[J R Sandoval EA]

I find it difficult to believe that you have clients that don't give you certain information that is important to their return...

I have never heard of such a thing....

Just for the benefit of the group, I spoke to the Franchise Tax Board in California and the IRS and both agencies were very helpful; both said they had received the funds back from the bank. FTB said they were sending a paper check this week; IRS said they would send a paper check on May 1st. It is not bad after all as the returns were efiled on 3/31/09.

Thanks

J R Sandoval, EA

[B. Jani]

I always email signature forms to client to sign and return to me by fax/email before i efile. I also tell them to write down (1) routing number and (2) account number on the form they send me if they want direct deposit or withdrawal. If they tell me same as last year, I do not accept that and tell them that if they do not give me in writing, no direct deposit. It works so far and not a single error.

[Jack from Ohio]

I always email signature forms to client to sign and return to me by fax/email before i efile. I also tell them to write down (1) routing number and (2) account number on the form they send me if they want direct deposit or withdrawal. If they tell me same as last year, I do not accept that and tell them that if they do not give me in writing, no direct deposit. It works so far and not a single error.

We have trouble with people understanding the simple task of signing the 8879 and sending it back. Even those that have e-filed for 5 years... "You mean I have to sign it and send it back??"

No easy working answer for the account # problem.

[Margaret CPA in OH]

I send a pdf of the returns (password protected) including the page that shows the bank account and routing number. My blurb that accompanies the pdf states to check the bank numbers and print out, sign and fax, mail, or scan and email the 8879 (and state form if applicable) and then I will efile. If there is no bank info, I call or email until I get it and I always insist that it be in writing, fax or email.

On occasion I have to recontact folks to remind them that no signature, no efile. So far, so good!