DizRotus Posted June 2, 2015 Share Posted June 2, 2015 (edited) If you make electronic payments to a tax authority, only do so from an account dedicated to that purpose. The same goes for receiving payments such as tax refunds electronically. The above tip was offered by an extremely helpful PNC business banker. I was speaking to him to get documents needed to clear up a tax SNAFU with the State of Michigan. As the PNC rep in Pittsburgh said, "If Michigan is anything like Pennsylvania, they could screw up a one car parade." The reasoning being that you don't want the IRS or a state tax authority to have easy access to your business bank account. If they decide you owe them money, they could tie up your account and play havoc with your receivables and bill payments. Fortunately, I am able to create such a dedicated business account with no additional fees or minimum deposits. As online tax payments are made, I will transfer only the necessary amount from the general account into the dedicated account. Having a separate deidicated account isn't practical for individuals. Nonetheless, he volunteered that he does not permit the IRS to do direct deposit; he requests any refund by check. FWIW, I was apprehensive a few years ago when PNC swallowed up the then latest incarnation of the bank I'd used for decades, but my experience has been excellent. Despite being a huge bank, the service I receive is excellent. Edited June 2, 2015 by DizRotus Quote Link to comment Share on other sites More sharing options...
Gilbert Posted June 2, 2015 Share Posted June 2, 2015 June 15th coming up hard -n-fast.... thanks for the quarterly reminder Quote Link to comment Share on other sites More sharing options...
Moderators dtel's wife Posted June 2, 2015 Moderators Share Posted June 2, 2015 This is true I have heard of some businesses having their accounts seized by the IRS or other authorities for delinquent taxes. I would also be very careful about transferring funds from a "General Account" into any account with the same financial institution you may be using to pay the IRS or other tax authority. It is my understanding when a "seizure" is issued, it covers "any and all accounts in the account holder's name with the designated financial institution". YMMV and I would definitely confirm this with your tax adviser as I'm not certain this is true, although it does make sense. Quote Link to comment Share on other sites More sharing options...
mustang guy Posted June 3, 2015 Share Posted June 3, 2015 When you open an account you provide your SSN or your FEIN. That is reported to the IRS. I don't know about the states. 1 Quote Link to comment Share on other sites More sharing options...
Moderators Travis In Austin Posted June 3, 2015 Moderators Share Posted June 3, 2015 Where having a seperate account is a big, big issue, and almost a must is if you have employees. You set up a seperate payroll account and you make your 941, and other payments like state unemployment out of that account along with the actual payroll checks. There are two reasons for this, one is an accounting control, if one of your employess forged, altered or stole from this account they could get away with little ir anything. The second reason is that FICA, FUTA and the rest of the stuff in your 941 payment is pretty much required to be by epay method. That is the one type of tax, employmwnt taxes you owe on behalf of employees, that they can go in and withdraw funds pretty easily. You fole quarterly returns, etc. ,but if you don't file a return or miss a payment and you dont respond to an inquiry they can go in and take that money, because it technically isnt your money. Thwre have been i stances where the IRS has made a mistake by adding an extra zero so instead of withdrawing 2,000 they take iut 20,000 And you have to wait to file next quarters return to get it back. Having a seperate account avoids this. It terms of a business and estimated quarterly payments for federal INCOME tax you don't really need a seperate account if you pay by check through the mail. If you use an epay method, which I strongly discourage, the danger isn't that they can cone in and suck your account, it is the risk with ANY epaynwnt, an error in processing and the effort to fix it. The same coukd gapoen with yiur home mortage payment. The IRS cannot hit your account for income tax until they go through a multistep process, letters, audit, etc. If they get a judgement against you for unpaid taxes they can go after the business accounts, all of them, the individuak acciunts of principal owners, and others. They are not limited to bank accounts, they can seize equipment, realestate, any business assets, including money yiu are iwed by customers. Income tax refunds by direct deposit doeant really require a seperate account, there is a layer between you and the URS that prevents a backcharge, that is why yiu pay a fee for efile. Have a seperate payroll account for sure, and any other taxes, federal state and local you have to pay by epay. 1 Quote Link to comment Share on other sites More sharing options...
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