Bank Account Verification

[joshharmeningcpa]

It is so crucial we get the taxpayer's bank account verified correctly especially during these financially troubled times when our clients are relying on tax refunds and their upcoming economic impact payments.  I have pleaded with ProSeries for years to provide us a simple bank verification form which would be a single document that allows us to get the client to verify and sign off on the correct routing/account number for purposes of receiving their refund.  I have to manually create this which just is time lost unnecessarily.

Let me know what you think please.

Josh

[itonewbie]

Simplest thing to so is to get a copy of a cancelled check?

[TAXOH]

That's what I do, get a copy of their check or have them give me a voided check or have them write down their routing and account numbers.

[itonewbie]

If they don't provide a cancelled or voided check, we have a section in our electronic organizer for direct deposit.  Under that section, for each of the accounts they provide details, they will need to check a box to ascertain that "I confirm that the bank account information and the direct deposit/electronic withdrawal options selected above are correct."

[rbynaker]

This is one of those things I didn't know I was missing until I had it.  Drake has one and it's great.  I highlight "verify your bank info" and the bank info.  The clients sign it along with their 8879s.  Sometimes I write a note on it "the most important numbers on your tax return!"

[Just-Lisa-Now-]

so they sign off and it still ends up being wrong...even its their fault, its still wrong. 

So Im not sure it really solves the problem, unless you making a typo is generally the problem.

I hold the check right up against my monitor and compare the numbers, haven't finger flubbed one since I started doing this.

[IRonMaN]

So they sign off and say “that’s my bank account”.  But there is a certain percentage of mankind that is going to sign off because they were told they had to but will never look at it.  To use the words of a dear friend “I’ve got morons on my team”.

[Just-Lisa-Now-]

Ive seen a few of the states have it right on their 8879, so it is handy...assuming the client know their routing and acct number and would notice if its wrong.

[rbynaker]

It's just an "awareness" thing.  For the "where do I sign" folks, they're not going to read the bank info even if the state has it on their signature form.  They're not going to check it on the client copy of their 1040.  They don't understand taxes and don't want to.  The purpose of an 8879 and state equivalent is to obtain authorization to file electronically.  The purpose of a "verify your bank info" form is solely for them to verify their bank info.  It's specifically the "head in the sand" clients that I hand write a note "most important numbers on your tax return" on the form and highlight "verify your bank info".

I'm good at getting this info updated as part of tax prep anyway, but I have had one client whose bank account was compromised between the time they sent me the organizer (checking the box to use prior year bank data for direct deposit) and the time their return was completed.  So in one case we were able to correct the bank info before it got transmitted.  So sure, it's probably mostly paranoia on my part, but I think it does bring awareness to the issue and if I can prevent even one error it's worth it.

[itonewbie]

Bank account changing between data gathering and actual filing is a valid point.

[joshharmeningcpa]

TaxWorks had it too!  I miss TaxWorks from back in the day.

[BobKamman]

@itonewbie   "Bank account changing between data gathering and actual filing is a valid point."

Don't tell that to the paperwork freaks who are screaming and yelling about not being able to schedule payments more than three months out.  

Come back this time next year for the posts:  "My client wants me to pay the penalties because I didn't warn him about changing bank accounts."

[BobKamman]

@Just-Lisa-Now-   "I hold the check right up against my monitor and compare the numbers, haven't finger flubbed one since I started doing this."

Warn your clients that you might be overdue?

[itonewbie]

@BobKamman  They can't pull this stunt with us.  We got this covered in both the EL and transmittal letter.

If they try, it's time to disengage.  But surely, they are out there, like it or not.

[BobKamman]

Negligence can't be waived.  

[itonewbie]

@BobKamman  But that wouldn't be negligence if that's not the result of our mistake but their failure to inform us they had changed their bank account and we specifically instruct them to review the return for items that may require changes before signing it.  How is that negligence?

[BobKamman]

@itonewbie   

You mean, you don't check back with them every month to make sure they still have the bank account, and remind them that you have set it up for an automatic withdrawal?  I'm sure some will consider that negligent.  

Not to mention, I'm so old I can remember all the failed banks that were taken over by FDIC or FSLIC during the 2008 economic crisis. Most of their accounts were assigned to healthier banks, with new numbers.  You know that banks are going to fail, when there is bipartisan support in Congress for pumping cash into the economy to save some of them.  

[itonewbie]

Gotcha!  I think we all should as a matter of best practice, lol.

[joshharmeningcpa]

I am switching to UltraTax and now I can obtain bank verification through a wet signature on a form or through e-signature.  Life is good.  It amazes me how Intuit wouldn't add this very simple feature after requesting it for many years.  I was a 10 year customer.  I never heard from the company until now when I have not renewed.  UltraTax is pricier I know but so worth it.

[judy-pentacle1]

There is form for corporations--why not individual?