Refund Direct Deposit Limits

Tuesday, November 25, 2014

In an effort to combat fraud and identity theft, new IRS procedures effective January 2015 will limit the number of refunds electronically deposited into a single financial account or pre-paid debit card to three.

The fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer.

Taxpayers also will receive a notice informing them that the account has exceeded the direct deposit limits and that they will receive a paper refund check in approximately four weeks if there are no other issues with the return. Taxpayers can track their refunds at Where's My Refund? The vast majority of taxpayers will not be affected by this limitation, and we would encourage taxpayers and tax preparers to continue to use direct deposit. It is the fastest, safest way for taxpayers to receive refunds.

The direct deposit limit will prevent criminals from easily obtaining multiple refunds. The limit applies to financial accounts, such as bank savings or checking accounts, and to prepaid, reloadable cards or debit cards.

However, the limitation may affect some taxpayers, such as families in which the parent's and children's refunds are deposited into a family-held bank account. Taxpayers in this situation should make other deposit arrangements or expect to receive paper refund checks.

The new limitation also will protect taxpayers from preparers who obtain payment for their tax preparation services by depositing part or all of their clients"� refunds into the preparers"� own bank accounts. The new direct deposit limits will help eliminate this type of abuse.

Direct deposit must only be made to accounts bearing the taxpayer's name. Preparer fees cannot be recovered by using Form 8888 to split the refund or by preparers opening a joint bank account with taxpayers. These actions by preparers are subject to penalty under the Internal Revenue Code and to discipline under Treasury Circular 230 (also, see Circular 230 Tax Professionals page).

Los Taxes News and Press Releases

This article has been read 1046 times.

Would you like to own a Los Taxes Franchise?

For more information about becoming a Los Taxes Franchise owner, including a franchise overview, start-up costs, fees, training and more, please visit our Los Taxes Franchise Information page.

Los Taxes Logo


2812 Fulton St,
Brooklyn, NY

Phone: 718-645-0690
Fax: 718-301-1820

Los Taxes Franchise Information

Share This Page!


FREE FRANCHISE ADVICE

First Name:
Last Name:
Address:
City:
State: (US inquiries only please)
Zip:
Phone:
Email:
Capital to Invest

(Min $50k Investment)
Investment Timeframe:

Can I use my 401K or IRA
to buy a business?

Submit your request for a
FREE Franchise Consultation.