Refund Screw up 0 HR Block

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#1
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So the young lady that works for me, an EA, made a huge error.

She prepared a tax return for a client who previously used HR Block.

He told her to use the same checking info from his PY Tax return.

The return was perfect except she copied the banking info from the tax return HOWEVER...

It was banking info for HR Block. Apparently the client paid his Block fee from the refund and the money goes to their account.

Well.. his 3K refund was deposited in that account this year and I feel worse than awful. It is my fault as I knew it, I told her and she made a human error and dummy I am, didn't catch on review.


So I told client I would waive his fee AND if not resolved in 2 weeks I would write him a check for 3K and then I would pursue Block. Young golf pro, young kid at home, needs the money. I lost sleep last night and 3K means little to me here in relation to them. He's basically broke, paycheck to paycheck.

Any thoughts on how to get to Block here? He called them and felt like they gave him the run around.
 

#2
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That's a tough one. I'm sure, filing a claim in small-claims court would get their attention but I'd try reaching a regional director at Block first. Somewhere along the telephone highway is someone in a position of power who can help you resolve this. It's a question of which bushes to shake the hardest.

I have never been a fan of direct deposit for clients as I always saw it as a malpractice claim waiting to happen should there be a error in bank acccount information. Every year, each client is required to physically sign off on the banking-information report produced by my software showing the refund amounts they expect to be direct deposited into their bank account. I want that monkey sitting on the client's back, not mine.
 

#3
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Taxalmancer wrote:That's a tough one. I'm sure, filing a claim in small-claims court would get their attention but I'd try reaching a regional director at Block first. Somewhere along the telephone highway is someone in a position of power who can help you resolve this. It's a question of which bushes to shake the hardest.

I have never been a fan of direct deposit for clients as I always saw it as a malpractice claim waiting to happen should there be a error in bank acccount information. Every year, each client is required to physically sign off on the banking-information report produced by my software showing the refund amounts they expect to be direct deposited into their bank account. I want that monkey sitting on the client's back, not mine.


Agreed. My engagement letter AND the 8879 E mail request both state that but still... this is on me.

I don't think it needs court, but who knows. I just was hoping someone on this board might have a contact at HR.
 

#4
CathysTaxes  
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I thought it was illegal for a refund to be deposited in the tax preparer firm's account. Was this a rapid refund?

Like others, clients are required to confirm their account on my questionnaire, on a signature form generated by the software and the efile authorization forms so everyone screwed up, including the client.
Cathy
CathysTaxes
 

#5
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CathysTaxes wrote:I thought it was illegal for a refund to be deposited in the tax preparer firm's account. Was this a rapid refund?

Like others, clients are required to confirm their account on my questionnaire, on a signature form generated by the software and the efile authorization forms so everyone screwed up, including the client.


Not sure but I believe it was clearly a Block account.
 

#6
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Thoughts...

When a client requests direct deposit of a refund, the routing number and account number are printed at the bottom of page 2 of the 1040. Did you deliver a draft to the client for review before they signed the efile auth? If yes, was everything visible (as opposed to masked). If yes, the client is equally culpable in the mistake. Don't beat yourself up.

I don't know that I would have been so hasty to wave the entire fee. Mistakes happen, we're all human. The important thing is to resolve it in a way that leaves the client feeling satisfied. If I was able to resolve it quickly, I might have offered a few hundred dollars off for the inconvenience, or 25% of the fee, whatever is less. Waving the entire fee and offering to pay the entire refund is a bit overkill and a knee jerk reaction IMO. But you already made promises so stick with them.

If you're having trouble sleeping, wire the client the amount of the refund. Get a POA in case you need it later. Contact customer care at H&R block, every day if you have to. You need to work directly with them to get the money back. They may choose to send it back to the IRS, at which point the IRS may issue a paper check to the client's last known address. Presumably at that point the client would reimburse you that money. So, keep them around. :)

https://www.irs.gov/faqs/irs-procedures ... quiries-18

FWIW, any time a 1040 client gets a refund direct deposited my tax software generates a page with bank name, routing number, and account number. There's a space at the bottom for the client to sign and date that the information above is accurate, I'm authorized to use it, and that any mistakes or account closures are the responsibility of the client. It gets included in each 1040 esignature package every time it's generated. For good reason as you might gather.
 

#7
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ManVsTax wrote:Thoughts...

When a client requests direct deposit of a refund, the routing number and account number are printed at the bottom of page 2 of the 1040. Did you deliver a draft to the client for review before they signed the efile auth? If yes, was everything visible (as opposed to masked). If yes, the client is equally culpable in the mistake. Don't beat yourself up.

I don't know that I would have been so hasty to wave the entire fee. Mistakes happen, we're all human. The important thing is to resolve it in a way that leaves the client feeling satisfied. If I was able to resolve it quickly, I might have offered a few hundred dollars off for the inconvenience, or 25% of the fee, whatever is less. Waving the entire fee and offering to pay the entire refund is a bit overkill and a knee jerk reaction IMO. But you already made promises so stick with them.

If you're having trouble sleeping, wire the client the amount of the refund. Get a POA in case you need it later. Contact customer care at H&R block, every day if you have to. You need to work directly with them to get the money back. They may choose to send it back to the IRS, at which point the IRS may issue a paper check to the client's last known address. Presumably at that point the client would reimburse you that money. So, keep them around. :)

https://www.irs.gov/faqs/irs-procedures ... quiries-18

FWIW, any time a 1040 client gets a refund direct deposited my tax software generates a page with bank name, routing number, and account number. There's a space at the bottom for the client to sign and date that the information above is accurate, I'm authorized to use it, and that any mistakes or account closures are the responsibility of the client. It gets included in each 1040 esignature package every time it's generated. For good reason as you might gather.



Yes... all good points. I will pay him the refund in 2 weeks if Block doesn't make this right and then I will pursue Block. I was in his shoes 25 years ago. Young kids, broke etc. I have been blessed last few years so I will pay it and chase Block myself.

All points well taken, BUT for some reason I feel "extra" responsible because I KNEW the account was not his, told her to change it and she said she did, but she got distracted. My fee I don't care about. It was almost a Pro Bono return as it is a friends son. I did it at half price, was gonna do it for free.

Thank you!
 

#8
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This can be resolved. I had a similar issue last year. You need to call the IRS (can't remember if there was a form to complete as well) and let the IRS know what happened. They will put a trace on the deposit and at some point (in my case was about 2 to 3 months) the IRS will get the money back from the incorrect bank account. Once the IRS gets the refund deposit back they will issue taxpayer a refund check. Also, note for the state (in this CA) it was a more difficult process however the IRS process was actually reasonably smooth.
 

#9
AlexCPA  
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When I mess up my clients' taxes I just give 'em one of these: https://imgur.com/a/aTM2pPF.
Even more of my antics may be found on YouTube:
https://www.youtube.com/channel/UCXDitB ... sMwfO19h7A
 

#10
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And if you're a cost conscious CPA, the lettering will fall off in the wash.
 

#11
AlexCPA  
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That's c azy. All my stu f is sup r hi h qual ty.
Even more of my antics may be found on YouTube:
https://www.youtube.com/channel/UCXDitB ... sMwfO19h7A
 

#12
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wkstaxprep wrote:This can be resolved. I had a similar issue last year. You need to call the IRS (can't remember if there was a form to complete as well) and let the IRS know what happened. They will put a trace on the deposit and at some point (in my case was about 2 to 3 months) the IRS will get the money back from the incorrect bank account. Once the IRS gets the refund deposit back they will issue taxpayer a refund check. Also, note for the state (in this CA) it was a more difficult process however the IRS process was actually reasonably smooth.


Thank you!!!! Good points. Really appreciate it.

I Venmo'd him over 3K last night. He said Block was very cooperative but said it will/could take 3 months to figure out.
 

#13
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Don't beat yourself up too much. Mistakes happen, and you are really doing a great job trying to make it right, everything will work out okay here.
 

#14
EZTAX  
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I was in a similar situation many years ago. Somehow screwed up the account number after the client had signed off on it (never figured out how). He was hurting with rent due. Wrote him a 2k check so I could sleep at night. Beyond releived when he came in 4 months later and made good on it after he finally received his check in the mail.

We all make mistakes. It is how you deal with them that matters and shows what kind of person/business you are. Good on you and I am sure it will work out in the end.
 

#15
Beagle  
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I thought if the name on the bank account and the client's tax return didn't match, the bank would bounce it back to the IRS and they would issue a check. Wouldn't the Block back account bounce it back since they don't have authority to deposit the funds?
 

#16
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So to put this story to bed... client called me and told me the IRS sent him a paper check.

He will pay me back and all is well... I suppose.
 

#17
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Is the client happy that you made good to begin with? if so, then all is, indeed, well.
 

#18
sjrcpa  
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Glad it worked out, and in a relatively short period of time, too.
 


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