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The one number on a return that you really don't want to get wrong
March 05, 2009
From the Des Moines Register:
Harry Rios told Des Moines police that a tax preparer with H & R Block copied his bank account number incorrectly on his tax forms and his refund was deposited into the bank account of another person.Police Detective Terry Mitchell said the money apparently has been spent or at least moved out of that account.
Oops. What a mess. This has to happen some every year, but there is very little guidance on how to handle it. If the story is correct, the preparer didn't handle it all that well:
Later when Rios learned that the money had, indeed, gone into the wrong account and was subsequently removed from the account, he called H & R Block again to find out how to recover his money."They told me to call the police," he said. Officers took a report that they labeled "fraud - theft."
The preparer has already lost in an important way: it's in the newspaper because of an apparent preparer mistake. It might have been easier for them to settle it quietly with the client. While there is little guidance on how to deal with this sort of mistake, what guidance there is implies that it might be the preparer's problem to begin with.
FSA 200038005 deals with a case where a dishonest preparer changed a tax return to deposit a refund into his own bank account. The IRS said that they could issue a second refund to the theft victim.
Service Center Advice 199-017, by contrast, says that if the return is correct, but the bank mistakenly credits the wrong account, the bank has to make it up to their customer. This implies that the person who makes the goof is on the hook. If they follow that logic in the Des Moines case, the preparer would have to make up the refund and go after the person who got the incorrect refund to get reimbursed. Good luck with that.
UPDATE: This story has been picked up by Kay Bell, Roni Deutch, and William Perez.
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Comments
. . . and this sort of mistake is why a real preparer would ask you to double check everything, ID numbers, DOB, account information. This is actually part of my system in my office. Upon completion of a return I won’t transmit or give completed return to client for mailing until after I have verification that they have reviewed all information.
Just goes to show, HeRBert needs better preparer training.
Posted by: Bruce | March 5, 2009 2:23 PM