Phantom electronic funds withdrawal.

[TaxmannEA]

A client just called me and reported that their bank statement showed a pending electronic withdrawal from their account for the balance due on their return.  The problem is that I did not set the transaction up on the return. They have already sent a check and voucher as payment. The amount shown on the statement is correct. I don't even have their account information on file. How would this be possible? I'm at a loss on this one.

[Bart]

Sounds like the IRS is processing their paper check as an electronic check and withdrawing the funds from their account.

[BulldogTom]

1 hour ago, Bart said:

Sounds like the IRS is processing their paper check as an electronic check and withdrawing the funds from their account.

Hope you are correct.   Sounds right, but I have not seen this before.

Tom
Longview, TX

[TaxmannEA]

The check was mailed just 3 days ago. I doubt that IRS has even open the envelope yet.

[jklcpa]

From IRM here: https://www.irs.gov/irm/part3/irm_03-017-278#idm140034069386688

Quote

3.17.278.2 (12-02-2021)

Paper Check Conversion (PCC) and Remittance Strategy Paper Check Conversion (RS-PCC) Overview

1. Paper Check Conversion (PCC) is a system that converts checks into electronic format. The PCC system scans checks, automates the receipts, accepts, transfers, and provides a recording of electronic funds. Paper checks are no longer being sent to the bank for processing. A shredder must be located within the unit where the scanned checks are securely stored.
2. IRS started using the Remittance Strategy Paper Check Conversion (RS-PCC) to electronically process paper checks. Paper check remittances, presented for payment, are scanned with a desktop scanner and the data is converted to electronic format for processing and long term storage. RS-PCC accepts payments for scanning purposes, records the conversion of funds from check to electronic format, automates the receipts, then transfers the funds through a secure internet transmission to Fiscal Service. RS-PCC interfaces with the Electronic Federal Payment Posting System (EFPPS). This allows the taxpayer’s payment information to post to Master-file. The RS-PCC system enables Consolidated Campuses, Field Office Collections, and Taxpayers Assistance Centers (TAC) to electronically process paper remittances at the point of receipt.

RS-PCC processes the following types of remittance:

• Discovered Remittances: Are payments found outside of the Receipt and Control Extracting secured/restricted area.
• Field Office Remittances: Are payments that are received in the TAC and Field Collection.
• Insolvency Remittances: Are payments sent to the IRS by taxpayers that have filed bankruptcy.
• Mis-Direct Remittances: Are payments sent to an erroneous IRS address.
• Offer in Compromise Remittances: Are payments sent to the IRS by taxpayers offering a portion amount of their tax liability.
• Voluntary Disclosure Program (DVP) Remittances: Are initial payments from taxpayers pre-cleared for the VDP program that are directed to Austin Submission Processing Center.
• Perfect and Imperfect Remittances: Perfect remittances are payments that have all the essential data needed to process the payment such as name control, tax period, social security number (SSN) or employer identification number (EIN). Imperfect remittances are payments with one or more essential items missing. This type of payment is not perfected and requires research before processing.
• Decedent and Gift Remittances: Are payments sent with the Form 706 United States Estate (and Generation-Skipping Transfer) Tax Return and Form 709 United States Gift (and Generation-Skipping Transfer) Tax Return.
• Unidentified Remittances: Unidentified remittances are payments that cannot be immediately identified, applied to an specific taxpayer or tax period.

3.  As of October 1, 2012, IRS started using Over the Counter Channel Application (OTCnet).

 

[jklcpa]

Next section below that in same IRM under #3

Quote

24 Hour Deposit Standard. The Service is committed to a 24 hour deposit standard for tax payments collected. The standard is for the remittances collected in field offices to be processed on the day of receipt or by the next business day. For payments processed through the RS-PCC system, the 24 hour deposit standard is met by scanning the paper check and submitting it for deposit no later than the first business day after the date of receipt of the check. For campuses that process mailed receipts, all remittances of $100,000 or more must be deposited on the day of extraction. If the remittance is extracted after the daily cut-off time for processing the daily deposit, the remittance must be deposited with the next scheduled deposit that will be delivered to the depository.

 

[Lee B]

Judy, take the rest of the day off, you have earned it !

[jklcpa]

9 minutes ago, cbslee said:

Judy, take the rest of the day off, you have earned it !

I am, maybe.   I spent the morning waiting at my mom's house for Comcast to come fix her cable and am going to watch a White Sox game next.