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I am a tax preparer doing tax returns specially for non

Hello, I am a tax preparer...
Hello,
I am a tax preparer doing tax returns specially for non residents,1040NR.
My clients are students who work in the US for the summer on a J1 visa,and they return to they country in Europe.
So ,usually,I receive the Refund Checks and mail it to them overseas.But I would like to be able to have them receive the Refunds directly in their bank account (in their country).I know this is possible ,because I know a company offers this to them:www.rttax.com.
But I couldnt find a bank that would retain my Fee from the refund,and wire the client the difference (overseas).How could I do this??Thank you!
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Answered in 12 minutes by:
1/18/2018
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 33,255
Experience: Personal Investment, Tax Preparation
Verified

Per regulations tax refunds may be ONLY deposited in the taxpayer's bank account.

So for these purposes - the bank should open an account in the name of the taxpayer.

When you try to open a bank account for a foreign person in the US - that will be required a physical presence of the taxpayer.

But when you want to retain your fees out of a foreign bank's account - you will need to have an agreement with each of these banks individually. Because of different regulations and language barrier - that will be hard to achieve...

There are some international payment systems - like PayPal - but Paypal is not an option for depositing the refund check.

.

You will need to find a bank which will open taxpayer's account without physical presence - and consider relatively small volume - the risk and overhead could be very large for the bank.

Unfortunately - there is no practical solution for your situation.

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Customer reply replied 6 months ago
I found about a bank who would deduct and deposit my tax Preparation Fees from the Taxpayer Refund,in my account (so client will not pay Up-Front for the tax preparation fee) and they will deposit the remainder to clinet bank's account in the US(So only applies to clients who already have a bank account in the US).
But they wont tranfer the remainder into a foreign account,in another country....https://www.republicrefund.com/Products/Refund-Transfers.aspxBut how can this tax preparation company do it then?Whats their secret?! www.rttax.com....As they DO Offer transfer of refund amount to client's bank account in Europe...

The issue here is not to establish such relation with the bank - but with the cost of compliance that might be large for the bank unless they have large number of such accounts.

First of all - according to Treasure regulations - tax refund may be ONLY issued to the taxpayer and may be only deposited into taxpayer's bank account.

Whatever is called Refund Transfer account - is a temporary account which is established with the ONLY purposes to deposit a refund check.
You may open such account for your clients if you are acting as a agent for that bank.

In this case - you must follow some standard - specifically - you should have a client in person and verify his/her picture ID .

If you get into contractual agreement with the bank to act as their agent - you will be able to help your client in opening such accounts.

The problem here is that you do not see the client in person and may not verify the ID.

But that woudl work perfectly when the client is in the US.

.

Another issue - to use existing client't account, but here we will not be able to have agreements with multiple banks regarding collecting tax preparation fees even you will get signed direction from your clients.

.

Clients may may transfer their own money from the US bank account anywhere in the work using for instance PayPal or Western Union.

But you may not simply initiate such transfer on behalf of each client.

Plus - there will be additional fees for such transfer.

So far based on today's bank regulations - all these procedure will be complicated and costly.

Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 33,255
Experience: Personal Investment, Tax Preparation
Verified
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