Discussion:Tax Professional's Trust Account for Client's Tax Payments to IRS

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Discussion Forum Index --> Tax Questions --> Tax Professional's Trust Account for Client's Tax Payments to IRS

Skasselea (talk|edits) said:

2 February 2007
I am considering setting up an account similar to a Lawyer's Trust Account. I believe it is OK to do so, but I am not completely certain about that.


In particular, I have a client who travels overseas extensively and for a variety of reasons wants to send his tax payments to me rather than making them directly to the IRS.


Earlier today, I discussed this with my IRS contact with the Financial Crimes Enforcement Network (FinCEN) and it is not a Title 31 problem, nor is it a Circ 230 problem.


What it would involve is the client sending his tax payments (primarily on delinquent liabilities) to me and made payable to a trust account I would set up at my bank. I would then write a check for the same dollar amount to the IRS.


I would charge the client a small fee to handle the transactions, but the fee would NOT come out of these funds. I would have him write me a separate check which would go directly into my regular business account.


You'd think that over the last 14 years this would have come up at some point, but it simply hasn't. I'd love to hear thoughts on whether you believe this is or isn't OK.

AKaccountess (talk|edits) said:

2 February 2007
Talk to your insurance person and see if that doesn't change your mind.AKaccountess

Skasselea (talk|edits) said:

2 February 2007
Why would I have any insurance concerns? Please give me specifics.

Lhhesscpa (talk|edits) said:

2 February 2007
Steve, Why not have your client make their federal tax payments through EFTPS. I recently called their Help line for a client who is in Iraq and learned that EFPTS.gov is available worldwide. Personally, I would not want to be responsible for making a client's tax payments. -- Larry Hess, CPA, Albuquerque, NM - Talk to me

Skasselea (talk|edits) said:

2 February 2007
Larry, I know that EFTPS is available, but that wasn't what he wanted to do.

Lhhesscpa (talk|edits) said:

2 February 2007
Just a thought. Spelled you name right, too :>)

Skasselea (talk|edits) said:

2 February 2007
Trust me...pun intended...this (or that) has been discussed with the client.

Natalie (talk|edits) said:

February 2, 2007
Stve, what you propose sounds fine. I agree it is best to have the administrative fee separately deposited into your operating account. I have a trust account for my clients. It was very easy to set up, and the bank doesn't even charge me a service fee. You might want to consider putting in $100 or so of your money in the account to cover any fees or charges for check orders.

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