Is my bank account filled with kryptonite?
April 10, 2006 4:07 PM   Subscribe

How do I find a competent human at the IRS? Or will my refund get spent by someone else, whose account number was mistakenly used (by my incompetent preparer) on my return?

My tax guy, who is "getting on in years," somehow stuck someone else's account and routing number on my tax forms this year, and now my refund has been deposited into some mysterious persons account, at a bank I've never used. I'm in a bureaucratic no-mans-land: everyone I talk to at the IRS tells me "this should never have happened. The deposit should kick back automatically because the name on the deposit doesn't match the name on the account" whereas everyone at the bank tells me "um...yeah, that deposit went through 6 weeks ago, and it's sitting in their account right now. you need to have the IRS initiate a reversal."

Of course, in over a dozen calls to the IRS, no one has ever heard of
"initiating a deposit reversal" and they all tell me my problem is between me and the bank, or me and the tax preparer.

I know the tax preparer is liable at this point, and I could do the lawyer thing, but I'm trying to resolve the bureaucratic talking-past-each-other without resorting to one of those bastards a lawyer (and, well, also not spend the full amount of the return [4k] on the lawyer, thus negating the whole purpose).

Has this ever happened to anyone here? Anyone know of a rock-solid way to get to someone at the IRS who can actually intervene/help in this odd situation?

[and, yeah, I had the paranoid "my tax preparer must have boat payments to keep up this year" thoughts. I'm good at the paranoia...don't need help on that front!]
posted by garfy3 to Work & Money (14 answers total)
Sue your preparer in small clams court. Or you could sue the bank. If people at the IRS don't know how to do a reversal, they're not going to do it.

I'd recommend going after the bank. They have your money, and they should give it to you. You don't need to hire a lawyer to do a small claims action, and the court fee should be nominal.
posted by delmoi at 4:15 PM on April 10, 2006

Why isn't your tax preparer taking care of this? He's the professional you hired to make sure everything was done correctly. It's his responsibility to straighten it out, whether it means him doing all the IRS hoop-jumping, or making a claim on his liability insurance.

You need to be firm with him that he needs to get you that money; give him a deadline. If he doesn't follow through, you should report him to whatever professional association governs his industry.
posted by MegoSteve at 4:41 PM on April 10, 2006

a well-written letter from a respected lawyer (a few hundred dollars at most) to the tax preparer may accelerate the situation to your satisfaction.

Needless to say, you also want to look for another tax guy.
posted by seawallrunner at 5:09 PM on April 10, 2006

Not specific help, but one thing I've always found useful when different people have been lobbing me back and forth is to plan a conference call.

Get the bank on the line with the IRS, and they can't both try to pawn you off on the other.
posted by kingjoeshmoe at 5:26 PM on April 10, 2006

I'm with megosteve: the only person who should be dealing with is the tax preparer. At least with the chain tax agencies, you allegedly would have them fork out the money for their mistake. I didn't catch the refund amount at first, thinking it was a small-ish amount (say, $500 or less) that your tax preparer should have long since just paid you that amount out of his own pocket. But four thousand dollars? Take him to court post haste- even if he's friendly old man tax advisor, he lost your cash, dude. I'm not clear on why your story doesn't detail how you tried, and somehow failed, to get him to fix this himself.

Seriously- this guy lost your money, and a significant amount at that, and for this privilege you also paid him?! The whole point of tax advisors is for them to do the work so you don't have to. It's possible that his work got you a refund you wouldn't have known about otherwise so that you paid him in part to even qualify for that 4K refund... but still, I'm betting the time you've spent in phone call hell has long eclipsed the efforts if you'd just filed your taxes, no matter how complicated, yourself and done it correctly.

IANAL, but they aren't all bad and they do serve a purpose. You peacefully try to get your preparer to "fix this" by playing phone tag with everyone he needs to, and let it be his headache- after all, if he's a legitimate, competent tax advisor he should also know the truth of whether it's the IRS's or the bank's responsibility to refund the money properly. If he fails to do so, or refuses to try, then you take him to court to force him to either do that work and get you your four thousand dolalrs back, or to be on the hook for the refund amount. This is what "the system" is for...
posted by hincandenza at 7:02 PM on April 10, 2006

A bit of a pickle indeed. You *are* supposed to read the tax forms before signing them...

You do need to put the hammer down on the tax preparer. Small claims court is cheap - read up on your local small claims system.

Here's an unencouraging anecdote.

I believe you should have no problem getting the money from the preparer in small claims court. The preparer likely has insurance which covers such mistakes on his part. He, in turn, may well be able to sue the account owner and get the refund money from them - indeed, he probably knows who it is already, since it's probably one of his other customers. Truthfully, the *bank* is in the best position to actually straighten this out, but they have absolutely no incentive to actually do so, so your recourse needs to be against the tax preparer.
posted by jellicle at 7:36 PM on April 10, 2006

I know you've already marked a best answer, but here's another suggestion: "Call your Congressman". Your Representative and Senators have staff that you're paying for (through those very taxes!) that often intervene on behalf of constituents. At the very least, they should be able to put you in touch with somebody who can straighten it out; at best, they might even take care of it for you.

Failing that, it does have to go back to the preparer. I think everyone else has that covered.
posted by SuperNova at 7:37 PM on April 10, 2006

I wish I had an answer for you, but I've been caught in IRS hell a few times. One of those times is when I somehow got somebody else's $2000 return. They sent me the check, and there was no way for me to track who it should have gone to. I called the IRS four times telling them it wasn't mine, and they kept saying "Yep, it is". I finally cashed it and they caught up with me to pay it back a few years later.
Good luck.
posted by Iamtherealme at 12:21 AM on April 11, 2006

jellicle: Thing is, I didn't see the return before it was filed. I thought I was going to the guy's office to see the tax forms and sign them before submission, but when I got there they had already been electronically submitted, and upon reviewing the form I said "who the hell's account is this?"...

Thanks for the suggestions, all. I tried the conference call thing this morning, but having to wait 15+ minutes on hold on both ends setting up the call leads to either end disappearing before the other end picks up.

While I would love to get this sorted out without loosing a big chunk of the money, I'll make one more call to the preparer and then get meself a lawyer.

(And as for the congressperson angle, I'm in D.C.--taxation without representation)
posted by garfy3 at 6:56 AM on April 11, 2006

IANA tax preparer or a lawyer, but why can't you just re-file with the correct information and tell the IRS the first one sent in was a mistake?
posted by cass at 7:23 AM on April 11, 2006

The guy that screwed this up should be going out of his way to fix it for you. He should be the one chasing his mistake, in the interest of saving his reputation. That's a major major blunder.

I would start by having a frank but calm talk with him about the situation. Something along these lines:
Look, Joe, I was counting on you to do this for me, and you gotta know that you dropped the ball. That's my money that's been given to someone else because of your mistake. The IRS and the bank are giving me the run around. This is a major problem for me. I like you, though, and we have a good relationship, so I want to give you a chance to fix this. What are you going to do for me to make sure that this gets fixed, I get my money, and it never happens again?
And for goodness sakes, make sure he refunds his fees!
posted by raedyn at 7:25 AM on April 11, 2006

jellicle: Thing is, I didn't see the return before it was filed. I thought I was going to the guy's office to see the tax forms and sign them before submission, but when I got there they had already been electronically submitted, and upon reviewing the form I said "who the hell's account is this?"...

Wow... that is WAY illegal.

I am a tax preparer, but not yours, blah blah...

So, that being said...

You should have been given the opportunity to pick a five digit "pin" that serves as your electronic signature on the return, and then signed form 8879, which gives your preparer authorization to efile a federal tax return on your behalf. It is illegal for him to transmit your return without this.
hell, the reason we need to have people sign that is because it shows both the refund amount (or amount owed) and bank account info, and it's one more chance to catch any errors!

So not only did this guy screw up, but because he was lazy/careless/rushed, he skipped over one of the steps that would have helped you catch his error.

Agree with everyone else, this is not your problem, this is his problem. He has to fix it, and I hope you didn't pay him a penny for this. Get your money back for the tax prep, tell him you don't care how he fixes it, as long as you have your refund back, even if he has to cut you a check for it himself.
posted by Kellydamnit at 8:43 AM on April 11, 2006

update: i had a firm talk with the tax guy, and he's refunding the tax fee, as well as fronting the full refund out of pocket. as for the IRS, it looks like that'll take another 6-10 weeks to hear back whether they are going to pull the deposit out from the other bank. i'm pleased to not be depending on their whim at this point.

interesting fact: the IRS does have a unit called the "problem resolution branch" but the criteria for being referred to them are based on levels of hardship. i.e., you have to be in danger of eviction, or lapsing medical treatment, etc, in order to be referred to the branch. apparently they don't deal with whiney ex-hipsters. who knew?
posted by garfy3 at 5:36 AM on April 12, 2006

Look in the phone book under United States. See if there is any local IRS office. Go there in person with all documentation plus copies to give them, and a written account of the whole mess. There is often a Federal Office in the Main Post Office. The actual humans at an IRS office can sometime resolve a problem on the spot.

The folks on the phone, especially this time of year, may be temps with limited training.

Your tax preparer is responsible, but since his competence is clearly questionable, doing it yourself will be more effective. He should immediately and cheerfully refund your fees.
posted by theora55 at 7:11 AM on April 13, 2006

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