This year there will be some changes to the number of direct deposits one account can accept from the IRS.
“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.”
This is an effort from the Internal Revenue Service to combat fraud from criminals from receiving mulitple refunds into one bank account or pre-paid debt card.
The second feature is to combat taxpreparers from spliting the taxpayers refund for fees using Form 8888.
“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.”
Tax preparer fees cannot be deducted from a taxpayer in this manner.
Nor can the tax preparer open a joint account with the taxpayer to receive payment for tax preparation.
Any tax preparer who is trying to collect tax preparation fees using Form 8888 is subject to penalty.
You should avoid a taxpreparer who is trying to split your refund using Form8888.
We look forward to helping you file your taxes.
Your Tax and Financial Coach,