New Split-Refund Form Available for Public Comment

[Appleby]

Hi All,

If you are an IRA Custodian, this may be on interest to you.

http://www.irs.gov/newsroom/article/0,,id=161331,00.html

It seems OK to me. One concern we had was how to apply the refund if it came in after the tax filing deadline, but that has been addressed. Also, the responsibility for ensuring the custodian codes the amount as a carry-back contribution rests with the IRA owner- which seems like a good thing.

[jevd]

Just a question for those of you in the independent trust or mutual fund business.

If you are not a bank and don't have your own routing number how can you receive those contributions if the only information the form provides is your banks rouoting number and "YOUR" account at the bank.

How do you get further credit to your client's account. If have more than one account for the client (multiple IRAs ROTH or Traditional etc) how do you determine which account even if the bank provides you with a SSN & Name (if they can).

Most wires are sent with a Bank routing number,your bank account number and an accoount number "for further credit" to the account owner.

This form is great for commericial banks and Savings banks but not so for third party trustees and custodians.

Any Comments??

Thanks for any input

I Know we can set up ACH deposits from the account owners bank to our account but we control the information on those transactions. We can't control the informatiion received on the IRS wire.

Please send comments to the IRS on this issue.

[Appleby]

Hi JEVD,

The Retirement and Savings Committee arm of the SIA is having ongoing discussions with the IRS regarding the forms. I will forward your comments to them.

I have a question though… excuse my ignorance, but I am not sure what you mean when you say you control the information.

Wouldn’t the transaction be done the same way it’s being done for other ACH transactions? From the IRS’ bank to the Credit Union/brokerage house?

[jevd]

Hi JEVD,

The Retirement and Savings Committee arm of the SIA is having ongoing discussions with the IRS regarding the forms. I will forward your comments to them.

I have a question though… excuse my ignorance, but I am not sure what you mean when you say you control the information.

Wouldn’t the transaction be done the same way it’s being done for other ACH transactions? From the IRS’ bank to the Credit Union/brokerage house?

On an ACH that we send to a Bank, we give them our account information with the for "Further credit information". we send a test and the bank confirms it.

Its what happens when someone sets up an automatic bill pay. Etc.

IRS Form 8888 doesn't allow for the additional information to get the deposit to the clients account with us. It only provides enough information to get it to our account with our bank.

e-mail me with any thing you find out.

[Appleby]

Thanks...I forgot about the verification piece.

Denise