In the News. IRS Limits Direct Deposit of Refunds

Beginning in January 2015, the IRS will be limiting the number of direct deposits into a single account to three transactions. This includes all bank accounts (savings and checking accounts) and any pre-loaded or pre-paid debit and credit card accounts. Any requests beyond three will automatically be converted to a paper refund check and mailed to the taxpayer.

The purpose of this change is to reduce the problem of taxpayers having their refunds stolen by criminals. Taxpayers who file multiple tax returns for different family members and have the refunds all deposited in a single account may be impacted by this new policy. In addition, this new direct deposit limit stops the practice of having filing fees directly paid out of a refund amount.

As an additional form of security, the IRS reminds us that direct deposits must be made to an account bearing the taxpayer’s name.