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#241 - 12/18/00 08:01 PM Internet transfers FROM business accounts TO personal accounts
D. Whitney Offline
New Poster
Joined: Nov 2000
Posts: 22
Hermitage PA US
Is anyone aware of any IRS rules (or other legal impediments) which restrict a business from making deposit account transfers directly into a personal account? I am aware of the IRS rule which requires checks made payable to a business be deposited into the business account rather than into a personal account. We are struggling with this request from a closely held corporation to permit the owners to make deposits to their personal accounts from the business funds. They do not want to pay the Bill Payment fees, which is the route I'd suggested the banker provide to the customer.
Any opinion stated above is mine alone and not my employer's.

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General Discussion
#242 - 12/19/00 10:28 PM Re: Internet transfers FROM business accounts TO personal accounts
A D Virr Offline
Gold Star
Joined: Oct 2000
Posts: 398
Derry, NH
I am not an IRS rules guru but I am aware of the restriction regarding checks payable to corporations. My instinct is that if the corporation can arrange ACH transactions (payroll), write checks to the principals (bonuses,etc.), then why can't they transfer from the corporate account to personal accounts of the principals of the corporation. It is their responsibility to file W-2s or 1099s with the IRS to report the income. And I might add, their accountant's or tax preparers responsibility to assure that happens.

I don't think it's the bank's concern to whom it pays money to.

Be advised, I am not rendering any legal opinion - only my thoughts on the issue.

Allan D. Virr, CRCM

Allan D. Virr, CRCM,CRP
Compliance Audit Solutions, LLC

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#243 - 01/02/01 09:37 PM Re: Internet transfers FROM business accounts TO personal accounts
Lucy Griffin Offline

Diamond Poster
Lucy Griffin
Joined: Nov 2000
Posts: 1,544
The bank should stick to its rules under its customer contracts and the UCC. If the check is properly endorsed, I'm not sure that you can be a traffic cop here. But -- I do know that my accountant would have a giant cow if I tried to make a deposit that way!

And then, there is always the question of suspicious activity. A pattern of this which could be designed to evade taxes... well, pull out the SAR and sharpen your pen.

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