Government Issues Limit on Direct Deposit Tax Refunds

Beginning January, 2015 the IRS will implement a new directive that limits the number of refunds taxpayer (s) can request to be electronically deposited into a singular bank account or prepaid debit card. From this point forward, therefore, individuals can expect the fourth and any ensuing refunds to be returned in the form of a paper check and sent through traditional mail services. Toward that end and in the interest of preparedness, the IRS has installed a program designed to notify all taxpayers who have reached or exceeded the limit of three direct deposits. This notification will also include an approximate date of the refund's delivery, with the provision that the return has no problems associated with it.

Unfortunately, the agency was forced to take this step in order to reduce rising incidents of identity theft and fraud perpetrated by dishonest tax preparers. Evidence continues to indicate that since the direct deposit initiative was enacted, an increasing number of innocent individuals have been victimized by criminals who, through illicit interactions and inappropriate information-sharing activities, obtained personal information that facilitated the receipt of several tax refunds to which they were unentitled. It's important to keep in mind that the government's goal is not to delay or complicate the delivery of tax refunds. Rather, the change has been issued as a means of safeguarding law abiding citizens from fraud.

Once again, an attempt at convenience has resulted in the compromise of confidentiality. This type of criminal activity has affected almost every sector of the financial community. While various branches of law enforcement, with the help of technology experts, are working hard to address the countless acts related to identity theft, a comprehensive resolution continues to evade them.

The IRS's latest decision should serve as an admonition emphasizing the importance of seeking the services of a qualified tax professional; one with a solid reputation for being competent and trustworthy. Many so-called tax preparation firms, lure clients with promises of on-the-spot refunds and/or loans against refunds. While these incentives may seem an enticing prospect, they should never be the singular reason for choosing a tax preparation firm. They are dealing with your money. You are entitled to ask informed questions. Avoid selecting firms that bring-on preparers just for the tax season. Remember...your finances are intimately informative...you should invest a great deal of thought and vigilance before making a decision that requires sharing this kind of information.


Sandra Riker, PSJ Business Solutions Sandra Riker is the Founder and Chief Accountant for PSJ Business Solutions. PSJ Business Solutions provides accounting and bookkeeping services to clients throughout the United States. At PSJ Business Solutions our primary goal is "Accounting For Your Best Interest". http://www.psjbusinesssolutions.com