Mad Rush - Electronic Banking

[Edsel]

How many of you have noticed state legislatures passing laws to require business returns be filed electronically and paid electronically.  A mad rush by governments (and others) to force electronic banking.  A discussion may be had for required electronic filing, but not this one.  This one is for payments REQUIRED to be paid electronically.

So many businesses are requiring electronic drafts that people are losing control of their bank accounts.  A $200 electric bill.  $100 cable bill.  $300 insurance bill.  All of them insisting on the right to suck money out of your bank account whenever they want and for whatever amount they want.  Not true, you say?  Better check with the bank.  The bank is not going to do anyone's accounting for them.  To them it's "Yes they can" or "no they can't."  If you are accidentally billed twice during the month, or for an amount greater than your electric bill, maybe an amount for someone else's electric bill, or for a disputed amount, the bank will NOT protect you.

Some of your clients are large enough to deal with this on their own, as they file their own payroll taxes, bills, etc.  Many small businesses, however, use people like US to file sales tax returns, payroll taxes, state income taxes, corporate taxes, etc.  And preparers like myself do not have signature authority, and often no bank account inquiry to know the status of a client's drafting ability.  So as we electronically file, we are supposedly required to pay at the same session.

It can get worse.  Do any of us want the liability that comes with signature authority for a client (electronically or otherwise)?   Or how about my own clients' experience with three states:  1)Virginia SIT duplicated a $1000 draft and we spent 15 months calling and writing letters to get it back.  2)Georgia takes $900 in corporate taxes, and does not respond to any letters or phone calls, and 3)Illinois overdraws $240 in SIT and we decide simply not to pursue it.

If you would like to respond or comment, you are welcome to discuss client options (such as ACH electronic payments which are triggered by your CLIENT, and not by the taxing authority).  Or discuss anything else relevant to subject.  You are also welcome to tell me that I'm sticking my head in the sand and refuse to accept modern trends in electronic commerce.  If so, I plead guilty.  Individual control should not be steamrolled by interests who want to control everything you do at your own peril.

 

 

[Lee B]

As a practical matter, the move toward efiling and epayments is combination of budgetary pressures at both the state and federal level and the resulting desire to

improve productivity in order to reduce personnel costs. In addition, revenue agencies are a favorite whipping boy for politicians who then cut their budgets.

As a result the IRS is planning on reducing our ability to call and talk to IRS employees by implementing interactive bot apps to handle most questions.

This trend is well under way and is not going to slow down.  One of my payroll clients received a failure to file notice for their 2nd quarter Oregon Payroll Reports,

when I had filed it online and had an email acknowledgement of the processing of the report by the state.  It turns out they had received and processed the report,

but it was sitting in limbo and the processing of the report was not finalized and recorded. So I had to call and sit on hold for 15 minutes before I could talk to

someone who put me on hold again while they tried to  find the quarterly report in their data processing system. Start to finish including talking to my client,

I probably spent a total of 45 minutes resolving an incorrectly issued notice. Still, I think it's an improvement over the days of using low paid temporary employees

to key in each report's information or to manually open envelopes and prepare bank deposits.

 

[Edsel]

25 minutes ago, cbslee said:

As a practical matter, the move toward efiling and epayments is combination of budgetary pressures at both the state and federal level and the resulting desire to improve productivity in order to reduce personnel costs. In addition, revenue agencies are a favorite whipping boy for politicians who then cut their budgets.

 

Agree, my friend from Oregon.  All of these agencies have a recorded message which plays over and over again while you are endlessly waiting on the phone, inviting you to solve your problem at their website instead of tying up someone on the phone.  All the taxing authorities have websites similar to irs.gov.

Problem is the websites do nothing to resolve problems.  Most of them offer dialogue but will not conclude or solve anything.  Also, more and more topics are added continuously, therefore making the websites increasingly unnavigable.

The movement begins with an unholy alliance of legislators and cabinet heads who force these changes because people will never know "who dunnit."  They need to think of what can happen when taxpayers have barriers placed in front of them when they try to pay.

The effect of this on efficiency, and even accuracy, is unquestioned if it works correctly.  However, I point to the loss of control over one's bank account with so many sources insisting on this sucking money out, and also the obstruction to us tax preparers when we encounter this upon filing.

[Edsel]

Again, the time for editing has lapsed, so I will add that the above will probably be construed as rants against taxing authorities.  Whereas this is obviously my perspective, my purpose is to inquire what we do when we encounter a "pay" requirement when we don't have signature authority or access to funds.  Also the increasingly encounters we have with banking arrangements that are so replete with pre-authorized drafts that clients can't manage their accounts, and what to do when taxing authorities draft duplicates, incorrect amounts, disputed amounts, etc.

[Lee B]

I can honestly say that in 25 years, I don't recall any draft dupiicates, incorrect amounts or disputed amounts from etransactions.

I do recall multiple times having to provide revenue agencies front and back copies of cancelled checks to the wrong place, because the check payment

was posted by a low level employee  to the wrong place.

[Catherine]

For myself, I do not allow ANY vendor access to my accounts.  I do have some items on auto-pay - each and every one of them payments that only I control, that I schedule, that I send out, directly from my bank.  I recommend to all clients to do the same.  If you read the fine print on those "sign up for direct payment!" agreements, yes indeed they say somewhere in the 2-point font size print something on the order of "if we think you owe it we'll go get it and if you don't like it tough noogies - plus we will fine YOU with bounced payment penalties if we take too much."  No.  Not now, not ever.  I'll go back to taking cash (legal tender for ALL debts, public or private) to a local payment center before I let anyone have free access to my money.;

[Edsel]

7 hours ago, Catherine said:

For myself, I do not allow ANY vendor access to my accounts.

Catherine, FINALLY a gal after my own heart!!  I can just hear them whine and whine about not getting a free pass into your bank account.  And a free pass is exactly what it is!

I'm not opposed to receiving an e-mail with a notice due, and then sending an ACH payment.  That way I remain in control.  Let's face it -- there is a savings in postage, printing, mailing, labor involved, etc. that the vendors are bailing out of.  And they have no intention of passing any of this savings on to the customer.  So it's not asking too much that they send an e-mail notice due instead of insisting on sucking whatever money they wish out of the bank.

Yes, I know if they are reputable they will make amends in case of an error.  However that will not include possible collateral damage or disputed amounts, and the bank will not stop them from taking whatever they want if it has been pre-authorized.  If you think the bank is going to police your account, better think again.

 

 

[Catherine]

7 hours ago, Edsel said:

If you think the bank is going to police your account, better think again.

If one works with a small credit union or small local bank, the chances are *much* better that they will help.  I strongly refer all my clients to small banks and credit unions.

[Medlin Software, Dennis]

I choose to use the electronic payment methods.  I have a separate bank account, only used for these items, and automatically transfer just enough balance to cover the bills (with a small cushion).  I may or may not just returned from salmon fishing with my son and FIL, and may or may not have paid bills and worked from the boat, RV, rest stop, etc.  I would not have options such as a fishing trip, without electronic banking and remote access.

I can't remember when I started epay for bills, so it has to be the early '90's.  I only have one which cannot be electronically paid, likely because a powerful public employee union protects the 3 or 4 local clerk jobs (for those who pay in person) when they gave in and allowed a centralized processor for mail in checks.  To be more exact, I believe the item can be paid electronically, but there is a fee, and must be automatic (I happen to prefer to manually trigger the payments).

[Catherine]

Just FYI - Massachusetts imposes a $100 fee/penalty/whatever on certain entities (corporations, mostly but not exclusively) who try to pay their taxes by check.  Interestingly enough, the secretary of state still charges a "convenience fee" on their online filing - but the charges for paying by check are higher still.  Why they don't just say "the fee is $X onine and $Y by check) I dunno.  It would probably make too much sense!

[Medlin Software, Dennis]

If taxation made sense, we would be out of work. Not that I prefer complication...

[BulldogTom]

As I am reading this thread, I got a text from my cell provider telling me my payment will be automatically charged today.  But I have it set up to charge my credit card, not my debit card, because credit cards are easier to dispute than debit charges.   I learned this the hard way about 10 years ago, when I wanted to dispute an automatic charge on my account from a vendor I had terminated service with.  The vendor would not remove the charge so I called the bank to dispute the charge.   They would not allow me to dispute because I did not initiate the dispute within 24 hours of it appearing.   They said because I have a business banking account with electronic access, they only have to give me 24 hours to dispute, where a consumer account has 7 days after the statement date to dispute a charge.   Sounded like bull$hit so I fired the bank and got a new one, only to find out that it is the rule for business banking.  Oh well...what are you going to do?   You need a bank.

Now, I only use my AMEX for autocharges.  They seem to be the very best at customer service when it comes to disputes.   Banks, on the other hand, not so helpful.

Tom
Modesto, CA

[Catherine]

Credit cards are another good way to deal with auto-charges.  Although you then have a zillion logins or phone calls to make when your number gets stolen and you need to change it.  Or even just card expiration date comes along and it's time to put in the new information.

[NECPA in NEBRASKA]

I will not make the payments for my clients. I efile their payroll or sales tax returns and my client's then have to make an ACH payment if required. I don't want anything to do with their bank accounts.