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Posted by Harlan Lunsford on October 6, 2007, 10:27 pm
Please log in for more thread options Dan Lanciani wrote:
> hnslunsford@bellsouth.net (Harlan Lunsford) writes:
>> Two points here:
>>
>> 1. Today my bank returned a client check due to insufficient
>> funds. Client was contacted, and he wanted me to run the
>> check through again. I explained that due to this new
>> Check21 system, I didn't have the check, so I couldn't run
>> it through again.
> That's not how I understand it is supposed to work. Your
> bank should have given you a legal substitute check.
> Check21 was not supposed to change the semantics of checks;
> just the way they can be transported. (Again, this is
> unrelated to ACH dips.)
>> Not that I was previously obligated too,
>> anyway. So maybe there's a benefit. A small one, though.
> How is it a benefit? You don't have the bad check (or legal
> substitute) to use to sue and/or request charges be brought.
>> 2. All of this points out the advantages of paying things
>> online as much as possible. When you do so, you can print
>> out the confirmation number on the web page provided by the
>> payee.
> That doesn't get you a cancelled check to show the IRS,
> though. Also, in the event of a dispute with the payee you
> are in the position of asking the payee to back up the
> evidence that you are correct and the payee is wrong. Of
> course, if they were willing to do that then you probably
> wouldn't have a dispute.
>
> My experience with trying to use printouts of web
> transactions as evidence is that the involved party
> dismisses it ("somebody made a mistake/you changed it/etc.")
> and third parties (e.g., credit card issuers) ignore it
> completely in favor of whatever the involved party says.
>
> IMHO, paying online by allowing the payee to pull money from
> your account is the worst possible approach both from a
> security standpoint (you have authorized them to access your
> bank account) and from a documentation standpoint (the bank
> will probably give you the same minimal documentation that
> they do for any other ACH dip). Pushing a payment from your
> own bank online is slightly better, but I found that my bank
> does not stand behind that process either, even when their
> own records are clearly self-contradictory.
>> We can pay 941/940 taxes online, and now we can
>> even pay our estimated taxes, both federal and state,
>> online.
> But why would we want to give the IRS access to our bank
> accounts? Now if they would take credit cards without a
> surcharge...
>> Thirty years ago there was buzz about a cashless
>> and checkless society.
> For many years we were told to maintain a paper trail, to
> keep our cancelled checks, etc. Now the banking industry is
> making it virtually impossible to do this so they can
> increase their profit margin. That industry, their
> appologists, and the government (who had to enable the
> banking industry) say this is all for our own good and that
> we suddenly don't need the paper. Yet when there is a
> dispute those same people are quick enough to demand the
> paper. What are we supposed to do?
Indeed, what ARE we supposed to do? The best we can, that's
what.
My policy has always been not to run a bad check through
again. Client is obligated to bring me cash to redeem it,
plus the 5$ fee my bank charges. Sure maybe one can "run
that copy" through again, but it's too much bother and
besides, I want client on notice that I don't tolerate such
behavior.
And I've never had any bad experience with online payments.
After all, I have a printout (if I even bother to print it
out) with a confirmation number on it. And next month's
statement, e.g from credit card company confirms receipt of
payment also.
When you pay a tax online, whether 940,941,1040, etc, that
is a one time thing, just like giving IRS your bank account
number for direct deposit. They don't just say "hurrah! we
got that sucker's bank account number! Let's save it in
case we need to levy his account in the future. No reason
for them to permanently keep it in your file, since people
change banks, some more frequently than others.
One state agency actually requires merchants to file all
sales tax reports online, and when tax exceeds 750$, the
requirement is to actually pay online.
So we may not be there yet, but headed in that direction.
One other note about cancelled checks. They are not the
absolute proof required by IRS. They accept any reasonable
proof of a transaction and it's payment. In some cases
admittedly, given the demeanor of the one under audit, they
may need to take a harder line, esp when it's apparent that
he's lying.
ChEAr$,
Harlan Lunsford, EA n LA
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