How'd the wrong number get entered?  

KP error on your part - I'd contact my E&O insurance carrier, ASAP.

Client gave you the wrong number - don't let the client's mistake become your problem.

That's a good question.  As I have seen here over the years when folks try to deposit their refund into someone else's bank account, it kind of depends on the financial institution whether or not it will fly.  Some make sure everything matches up perfectly and others have the opinion of this credit union - "how do we know you didn't want to deposit your refund into Aunt Betty's account"?  So whose fault is it?  Did the client provide a bad number or did someone have fat fingers entering a good number?  Sometimes in life we have to own up to our own mistakes, whether it is the preparer or the client.  I think what really sucks it the fact that some bozo acted like he or she just won the lottery and gobbled up the $1600 without any remorse.  For that jerk, I hope karma finds them soon.

damn straight my friend!!!

For $1,600, I would rather eat it than report it to my E&O carrier

For $100 I would find someone at the credit union who is willing to spill their guts on the name of the credit union customer that got the refund.  Then I would drop them a little note on how they are going to be visited by three ghosts on Christmas Eve --------------------- unless he gives the money back :santa:

I agree with that....the increased premiums would likely eat up $ 1600 in no time.

Ho Ho Ho!! :christmas_tree:

It's my understanding that the bank is not supposed to allow the funds to go to a Non-account owner (mismatch of SSN) per the rules that are supposed to prevent funding of terrorism via bank account activities like that. I would think that this would be a great lever in getting the funds to the rightful party.

Bank does not get SS# of taxpayer.  Only name, rt # and account #.

Yeah, no SS#.....but in essence I agree that the deposit/refund should have been bounced back due to the mismatch of names. I spoke to a banker and they do need to match up names. This Credit Union is full of crap.

Unfortunately as IRMN mentioned, the nephew probably owes Aunt Betty money so he put her name on direct deposit.  Or he did not have an account so he let Aunt Betty get money in mean time.  So are you saying Aunt Betty should not get the money that her nephew intended her to get.  Credit Union is simply doing as taxpayer (nephew) directed when he (or preparer) mistakenly listed wrong account number.  Bank is not guilty party!!

With FATCA and KYC/AML compliance, banks are zealous about matching names.  This is clearly a failure of the credit union's compliance process.

I would write a letter to the Credit Union describing that despite all evidence that shows otherwise, which you brough to their attention on more than one occasion, they seem to leave funds on deposit, which do not belong to this other person. They seem satisfied that is should be considered a legitimate deposit to their account, which you feel does not meet their requirements under the Patriot Act to hold the financial institution responsible that money is not being placed in accounts without proof of identification for the funds sent to the receiver, since that bypasses their responsibility to avoid or prevent money laundering or support of terrorism. You have done your best to bring to their attention that the wrong party has these funds, which makes it available to an unintended party to do whatever they want with the funds, and that you certainly can bring up the lack of identity confirmation and their lack of cooperation, to the IRS, when the funds are in fact a Federal Payment from the IRS payment directly to the party holding the funds in error and clearly meant for your client, that actual tax payer. You can make it clear the IRS can be brought in to examine the banking flow.

Not sure what you are talking about.  Money transactions are electronic and may not even be monitored as far as name.  And I am guessing a deposit from the US Treasury would probably not warrant an investigation for terrorism or money laundering.

"You can make it clear the IRS can be brought in to examine the banking flow."

Yes, their is probably a breach of their compliance process and operational control but I'm not sure if that really gives the IRS or other regulators cause to do a wholesale audit of the credit union, especially since the transmittal originated from the IRS, which is a legitimate source.

It appears you are concerned about the follow through of that letter. I am trying to point out that it costs you nothing to send the letter simply to get their attention. Never underestimate the power of "put it in writing."

Don't local newspapers and local TV stations like to do stories on how the banking industry screws over poor unsuspecting customers?  I would make one last contact with the credit union and then mention how you have a friend or relative at the local news outlet.  I'm sure the credit union will be happy to hear that they are going to get some free advertising. :smile:

:smile:

Eyewitness news! :wink:

Sometimes you have to think outside the box.  Watching 60 Minutes for the last 100 years does help in coming up with these ideas :smile:

I like the idea!