Santa Barbara Tax Products Group (TPG)

Transcription

1 Santa Barbara Tax Products Group (TPG) REFUND PROCESSING PROGRAM USER MANUAL 2018 User Manual, B, January 2018

2 Contents IMPORTANT NOTE REGARDING PROGRAM AVAILABILITY... 4 PROGRAM OVERVIEW... 4 A) TAXPAYER INSTRUCTIONS TO IRS... 4 B) FREE IRS E-FILE OPTION... 4 C) REFUND PROCESSING... 5 D) ABOUT PREPARER FEES... 5 E) BALANCE DUE RETURNS... 5 THE PROGRAM ENROLLMENT PROCESS... 6 A) IRS ENROLLMENT AND EFIN/PTIN APPROVAL... 6 B) TPG ENROLLMENT APPLICATION AND MANDATORY COMPLIANCE TRAINING... 6 C) TPG FINANCIAL SERVICES AGREEMENT (FSA)... 7 D) ACTIVATION OF NEW EROS... 8 E) OFFICE RECORD SETUP... 8 F) CONFIRMING ENROLLMENT AND VALIDATING OFFICE RECORDS AND SETUP... 9 G) ERO DISQUALIFICATION AND SUSPENSION... 9 SUPPLIES, MARKETING MATERIALS, MAILERS AND SHIPPING... 9 A) STANDARD SUPPLIES B) MARKETING MATERIALS DESCRIPTION OF REFUND PROCESSING SERVICES A) IRS DIRECT DEPOSIT AND IRS PAPER CHECK B) IRS REQUIRED 7216 CONSENT FORMS ) CONSENT TO USE TAX RETURN INFORMATION. This form is required to allow the tax preparer to use the taxpayer s tax information to determine if TPG products are available to the taxpayer. This form is provided to you as a courtesy on the TPG website, under the Downloadable Forms section. The ERO should print copies of this form for use during the tax season if the forms are not provided through the software. The ERO is required to provide to each taxpayer prior to discussing any TPG products. The ERO should have each taxpayer sign the consent form as soon as a tax refund amount is established. If Taxpayer Advance is being offered, a separate Consent to Use for Taxpayer Advance is required, in addition to the standard Consent to Use ) CONSENT TO DISCLOSE TAX INFORMATION. This form is required to allow the tax preparer to disclose the tax return information to a third party (i.e., TPG) if a TPG product is selected. This consent form will print out with the Program documentation. The ERO is required to have each taxpayer sign this document before the taxpayer signs their tax return, and before submitting the tax return. If Taxpayer Advance is being offered, a separate Consent to Disclose for Taxpayer Advance is required, in addition to the standard Consent to Disclose C) REFUND TRANSFER (RT) ) Procedure for Offering a Refund Transfer ) State Refund Transfer (SRT) D) FEE COLLECT (FC) PAYMENT OPTIONS ) Pay By Refund ) Pay by ACH Direct Debit ) Procedure for Offering a Fee Collect E) TAXPAYER ADVANCE F) TAXPAYER IDENTIFICATION DISBURSEMENT METHODS A) SITE PRINTED CASHIER S CHECK ) Description of the Check and Check Stub User Manual, B, January of 36

3 2) Check Shipments ) Check Storage and Security ) Check Handling Exceptions ) Forgery Procedures ) Power of Attorney ) Good Funds Check Cashing Agreement B) REMOTE CHECK PRINTING C) ACH DIRECT DEPOSIT D) WALMART MONEYCARD (IF OFFERED) ) How to Participate ) Procedure for Offering the Prepaid Card E) WALMART DIRECT2CASH OFFICE PROCEDURE AND PRACTICE A) BEST PRACTICE GUIDE AND USER MANUAL B) ERO CHECKLIST C) STATE REGULATORY REQUIREMENTS/STATE DISCLOSURES D) OFFICE SETUP E) IDENTIFYING THE TAXPAYER F) PRODUCT SELECTION AND IRS RULE G) DISCLOSING PREPARER FEES H) REFUND TRANSFER (RT) APPLICATION AND AGREEMENT I) FEE COLLECT (FC) AGREEMENT J) FRAUD PREVENTION K) PREPARER FEE PAYMENT INFORMATION L) FORMS TO DOWNLOAD TAX PREPARER/ERO COMPLIANCE MONITORING A) MONITORING PROGRAMS B) ERO CORRECTIVE ACTION CUSTOMER SERVICE SUPPORT A) CONTACT INFORMATION B) TPG INTERNET SUPPORT User Manual, B, January of 36

4 IMPORTANT NOTE REGARDING PROGRAM AVAILABILITY Please note that this User Manual provides information on our entire product line. You may not be eligible for all products or services described herein and the products and services described may not be available through the software provider you work with. Please check with your software provider as to the availability of a particular Program, product or service and check with TPG for eligibility. PROGRAM OVERVIEW Santa Barbara Tax Products Group, LLC ( TPG ) offers tax refund processing services using the banking services of Civista Bank ( Bank ). TPG offers a Refund Transfer service ( RT or RT product ) and a Fee Collect service ( FC or FC product ), and makes available tax refund advance products offered by a third party refund advance provider, to tax preparers and taxpayers. The RT, FC and refund advance products offered or made available by TPG for particular transmitters or tax preparers are referred to in this Manual individually or collectively as the Program. TPG provides refund processing services and customer support for the Program and has established Program guidelines, and is responsible for the Program s compliance with applicable law. TPG is a third party processor with respect to the refund processing services it performs for the Program. TPG offers refund processing services to taxpayers who: E-file their tax return, and Are owed a tax refund by the IRS. A) Taxpayer Instructions to IRS In order to apply for an RT or FC, the taxpayer must include on the tax return an instruction to the Internal Revenue Service ( IRS ) and/or state tax authority to deposit the taxpayer s tax refund to a temporary account at the Bank established by TPG on the taxpayer s behalf. When the tax refund is deposited into the temporary account by the IRS or state tax authority, TPG is able to make deductions from the refund on behalf of the taxpayer in order to pay for services such as income tax preparation. This allows the taxpayer to have their taxes prepared without having to pay preparer fees at the time the tax return is prepared. Once all fees and charges have been paid, TPG will disburse the remainder of the taxpayer s deposit account using the disbursement method selected by the taxpayer and close the temporary account. At that time, the services of the tax preparer will be completed. B) FREE IRS e-file Option A taxpayer does not have to apply for an RT or FC or utilize TPG s refund processing services in order to e-file their tax return. If a taxpayer files their tax return electronically, they can receive a refund check directly from the IRS in 21 days from the time their tax return is filed or the IRS can deposit their refund directly into their bank account in less than 21 days from the time the tax return is filed. When the tax preparer uses the tax preparation software to calculate a refund, the tax preparer should advise the taxpayer about the benefits of electronically filing a tax return and about the various options for receiving a refund including the IRS FREE options User Manual, B, January of 36

5 There is no charge by the IRS for this service but the IRS cannot deduct and pay tax preparer fees from the refund on behalf of the taxpayer. If a taxpayer chooses this option, the tax preparer will have to collect tax preparation fees directly from the taxpayer at the time their taxes are prepared. C) Refund Processing In order to participate in a TPG Program, the tax preparer must use tax preparation software that integrates and supports TPG s Program. If the client chooses to use TPG s refund processing services, the software will automatically populate the applicable TPG product application using information keypunched during the preparation of the tax return. The product application and any supporting disclosures are printed along with a copy of the tax return. The taxpayer signs a copy of TPG product documentation which the tax preparer keeps in its files, and the tax preparer pushes a button which causes the tax return and the product application to be electronically filed through the software provider. A copy of the tax return is transmitted by the software provider/transmitter to the IRS and to TPG. A copy of the product application is transmitted to TPG once the IRS has acknowledged the receipt of the tax return. When the IRS funds the return, TPG transmits a disbursement authorization back through the software provider/transmitter to the tax preparer. In most cases, the tax preparer will print a cashier s check for the taxpayer. Note: Tax preparers who work with a service bureau may have their software provided by the service bureau. Or, the service bureau may file the tax return and TPG product application on behalf of the tax preparer depending on the contractual relationship the tax preparer has with the service bureau. D) About Preparer Fees It is important to recognize that tax refunds are not guaranteed. On an average, about 8% of IRS refunds are not funded. The reasons for non-funding are varied and may include IRS offsets for outstanding taxes, government agency debt, denial of Earned Income Credit ( EIC ) claims, or fraud. When a TPG product is selected and the IRS does not deposit a refund with TPG, the tax preparer and TPG do not receive payment of their fees. Tax preparers should consider this when setting a price for their services. Preparer s fees are deposited by TPG directly to TPG account of the tax preparer or service bureau. Fees are paid within 24 hours of receipt of IRS funding unless delayed or frozen pursuant to the Financial Services Agreement (described below). Tax preparers must not charge higher tax preparation fees based on whether or not a taxpayer chooses an RT, FC or refund advance product. Fees should be reasonable and transparent, meaning that taxpayers should know exactly what fees will be charged for each product or service and a written fee disclosure needs to be provided from the tax preparer to the taxpayer. E) Balance Due Returns In instances where there is a balance due on a tax return, no refund is due and the taxpayer will have to find a way to pay both their tax liabilities and their preparer for their time in preparing their tax return. In this case, TPG will process a credit card payment or make an authorized direct debit of the taxpayer s personal bank account in the event the taxpayer does not have immediate funds User Manual, B, January of 36

6 THE PROGRAM ENROLLMENT PROCESS In order to participate in the Program, a tax preparer must have: A valid IRS-issued Electronic Filing Identification Number, A valid IRS-issued Preparer Tax Identification Number ( PTIN ) for the EFIN holder and every tax preparer that works under that EFIN Purchased software from a participating transmitter/software provider, Submitted a program enrollment application via the transmitter/software provider, Reviewed and agreed to the Financial Services Agreement, and read and understood the User Manual, Best Practice Guide, Compliance Memo and ERO Checklist, Completed the online training compliance module and posted a passing score and maintain documentation of passing compliance training for all PTIN holders under their EFIN. Note: Tax preparers who work with a service bureau 1 must consult the service bureau concerning the enrollment process and any additional requirements. A) IRS Enrollment and EFIN/PTIN Approval Before a tax preparer can file tax returns electronically, it must apply to the IRS for an Electronic Filing Identification Number ( EFIN ). Along with the application for an EFIN, the tax preparer must provide the IRS with a copy of their fingerprints. The IRS runs suitability checks on the tax preparer, including a criminal background check and credit history. IRS rules also require that the tax preparer complete continuing education and obtain a PTIN or Preparer Tax Identification Number. If the tax preparer passes the suitability checks and otherwise complies with IRS preparer registration requirements, they are issued an EFIN and a PTIN and notice is sent to the preparer by way of an EFIN/PTIN approval letter. These notices give the EFIN and PTIN number and state that the preparer is accepted as an Electronic Return Originator ( ERO ) for the purpose of electronically filing income tax returns with the IRS. TPG requires a valid EFIN and PTIN for each office that files tax returns and submits applications for TPG products and a PTIN for every tax preparer who works under that EFIN. The ERO must be prepared to provide proof of the EFIN and PTIN registration to TPG upon request. If the ERO is no longer able to produce an EFIN approval letter, TPG will accept a faxed copy of the approved EFIN application page from the IRS website. The ERO may have to obtain a PIN from the IRS to access this webpage. The EFIN is a critical part of the ERO s office setup and plays a critical part in the ability of the transmitter and TPG to process and track the returns and TPG product applications filed. It is important that you do not allow the unauthorized use of your EFIN. B) TPG Enrollment Application and Mandatory Compliance Training TPG has relationships with a number of electronic filing providers ( EFPs ). If an ERO uses one of these EFPs (also known as software providers), the EFP will provide the ERO with a TPG enrollment application. The enrollment application will be presented in electronic format and requires an electronic signature. The information required in this form includes the ERO s 1 Service Bureaus are resellers of software who often provide startup expertise to new offices. They provide hands on support that the Electronic Return Originator ( ERO ) cannot get from the transmitter. They often provide specialized training with respect to tax preparation and TPG products. Service bureaus bill the ERO on a per return basis for this help. TPG facilitates payment of the service bureau on behalf of the ERO by making payment to the service bureau from the preparers fees User Manual, B, January of 36

7 business name, physical address, shipping address, telephone numbers, EFIN, PTIN, social security number, EIN, address, electronic filing history and an authorization to run a credit report. The EFP may provide TPG with an electronic record of the application information or fax the form to TPG, keeping the original on file. The information from the fax or electronic record is used to set up an enrollment record at TPG. Tax preparers should review their enrollment record information on TPG s website as soon as they have registered through the EFP. The enrollment record is updated daily at TPG. MANDATORY ERO TRAINING: TPG requires that each EFIN holder completes the compliance training module located on The TPG enrollment application will not be activated until this process is complete and fees will be withheld. The ERO should make sure that each tax preparer in their office passes the compliance training and receives a completion certificate. Note 1 for ERO: EIN/SSN - In the event that TPG needs to report 1099-Misc income on behalf of the ERO, TPG will use the business or contact name associated with the EIN/SSN on the TPG enrollment application. The ERO should ensure that the contact information in the enrollment record is the same as the name associated with that EIN/SSN at the IRS. In order to report 1099-Misc income, TPG will use the EIN and company name in the enrollment record. If the EIN is not present in the record, TPG will use the SSN and business owner s name. The ERO should come to the TPG website and confirm or update the enrollment record to avoid misreporting to the IRS. Note 2 for ERO: Address - address is now required from each ERO as it will be the primary method used by TPG to communicate any changes in requirements, procedures, and other important information. Some of these communications may be directed to all EROs offering TPG products while other s may be directed to and pertaining to specific offices only. The ERO should make certain that an address that is constantly reviewed is entered in the TPG enrollment application as it will be each office s responsibility to read the communications and ensure its receipt. The address will not be shared and will not be used for any other purpose. C) TPG Financial Services Agreement (FSA) As part of the enrollment process, each ERO must consent to the TPG Financial Services Agreement ( FSA ). The FSA is a contract between the ERO, TPG and the Bank. The FSA sets forth the responsibilities of the ERO under the Program. Under the terms of the FSA, TPG can suspend an ERO from the program in the event the ERO does not perform in accordance with procedures set forth in the FSA, TPG User Manual, or Best Practices Guide. It provides that an ERO can be suspended if they are suspected of fraud, if the ERO s performance shows a significant number of unfunded transactions, or if the ERO engages in what TPG considers unacceptable practices. The FSA also authorizes TPG to freeze, reverse or debit Automated Clearing House ( ACH ) payments of an ERO s tax preparation and electronic filing fees that are associated with tax returns that are in dispute or with activity that TPG considers fraudulent or suspicious; that could result in losses to TPG; to ensure completion of compliance requirements or corrective action; or to reimburse TPG for payments to taxpayers due to the ERO S noncompliance User Manual, B, January of 36

8 Frozen, reversed or debited tax preparation and electronic filing fees will be released or paid to the ERO upon the ERO s completion or satisfaction of compliance requirements or corrective action, or payment to taxpayers, as applicable; provided, however, that after one year frozen, reversed or debited fees retained by TPG shall be forfeited to TPG or posted against losses accrued by TPG through the ERO s office or EFIN. Typically, the FSA is provided to the ERO in an electronic format as part of the EFP s online TPG enrollment process. Once the EFP forwards an electronic enrollment record to TPG and TPG approves the enrollment, TPG s a confirmation copy of the FSA to the ERO along with an activation letter. The FSA is also available as a download on The agreement is irrevocably confirmed when the ERO processes their first refund through TPG. It is critical the ERO reads and understands the FSA terms, conditions and requirements. It is also important to read the following materials in order to gain an understanding of the scope of best practices that TPG expects from each tax preparer: The User Manual Best Practices Guide ERO Checklist ERO Compliance Memo ERO Compliance Training D) Activation of New EROs The enrollment status is pending until activated. The ERO is activated once the following takes place: a completed enrollment record has been received from the EFP; the ERO has paid the software fees and fulfilled all the enrollment requirements of the EFP and TPG; and the ERO has passed the risk analysis review. TPG mails the ERO an activation letter, the FSA, and other important season updates or notices. As part of the enrollment process, the ERO is referred to to review a copy of the FSA, User Manual, ERO Checklist, Compliance Memo, Best Practices Guide, and Online Compliance Training Exam. The activation letter includes a link to TPG s website where the ERO can access these important compliance documents, reports and forms. The ERO should retain the activation letter. The activation of the enrollment record also creates a shipping record for supplies. The ERO is expected to read and be familiar with the Best Practices Guide, User Manual, FSA, ERO Checklist and Compliance Memo. Renewals/Pre-Approvals: Prior year TPG clients in good standing (i.e. EROs without open corrective action items) may receive an enrollment letter indicating they are automatically accepted into TPG s program. This enrollment letter should be retained for further reference. Although the ERO might receive this letter, they still need to complete the enrollment process with the EFP. E) Office Record Setup Before TPG can process fees on behalf of an ERO, TPG must receive an office record from the EFP through whom the ERO is filing. Some EFPs create the office record on behalf of the ERO and transmit the record directly to TPG. Whereas other software packages require the ERO to complete the office setup in the software and the software will generate the office record on behalf of the ERO which is transmitted to TPG. If the office record is not set up correctly, TPG will be able to process a refund submitted by an ERO but TPG will not be able to process the ERO s 2018 User Manual, B, January of 36

9 fees until the office record is set up correctly. It is the EROs responsibility to make sure the office record is set up correctly and that the ERO is receiving fees. TPG will not be responsible for misdirected fees that result from the failure of the ERO or their transmitter to provide TPG with a correct office record. Routing transit number ( RTN ) and the depositor account number ( DAN ) information will remain unlocked until the first day of IRS e-filing. After this date, RTN or DAN changes MUST be done through TPG. The ERO must fax their IRS EFIN Approval Letter, and a request to unlock the account information to If the IRS Approval Letter is not available, please submit an unexpired government-issued photo ID (i.e. Driver s License or Passport). TPG does not accept credit cards as forms of ID. Once TPG has unlocked the RTN/DAN field, a representative will contact the ERO and let them know it is ready to accept the changes by resubmitting their office record with the new bank information via the transmitter software. Each ERO should run a Fees Paid report on the TPG website after processing a TPG product to ensure that the correct fees are being paid. All record changes must be made through the EFP. F) Confirming Enrollment and Validating Office Records and Setup The enrollment status of the ERO can be checked via TPG s website at It is important that the ERO confirms their office information including SSN, EIN and address which are required fields. The ERO s enrollment status can be checked without using a PIN. The enrollment status is indicated as pending until confirmation is received from the EFP that the software fees have been paid. If the status is indicated as active, the ERO is approved to file TPG products but their office record must still be submitted (see above). An activated ERO can use their PIN to log in and validate the office record and setup. An activated ERO can make changes to the enrollment record through the website but all office record changes must be made through the ERO s EFP. G) ERO Disqualification and Suspension TPG monitors for patterns of unfunded accounts, excessive fees, and the profitability of EROs for the purpose of detecting the presence of fraud, lack of due diligence, poor office procedure that can result in losses or unacceptable practices that could be considered overreaching or predatory. If TPG receives a high number of customer complaints concerning a particular ERO or if it comes to the attention of TPG that an ERO is operating in violation of the law, in breach of TPG s FSA, committing fraud in the conduct of their business, engaging in unacceptable practices or having a significant negative impact on profitability, TPG may immediately suspend the ERO from the Program in accordance with the FSA or restrict the ERO to TPG printed checks. Prior to suspending or restricting the ERO, TPG will attempt to contact the ERO to discuss the situation. If the situation cannot be resolved to the satisfaction of TPG, the ERO s EFIN record will be inactivated at TPG and the ERO s transmitter will be notified of the suspension. SUPPLIES, MARKETING MATERIALS, MAILERS AND SHIPPING The supplies the ERO receives depends on the Program they are registered in. If the program allows for disbursement by check, they will be shipped check stock. If the program allows for disbursement by card and the ERO opted into that Program, they will be shipped card stock User Manual, B, January of 36

10 A) Standard Supplies Cashier s Checks: The initial supply shipment sent to most EROs will include cashier s check stock. Other important documents such as a Good Funds Check Cashing Agreement, a check log, and a supply order form may be included in the shipment or will be available for download from located in the Downloadable Forms section. If the ERO is new to TPG, the initial order will generally include 50 checks. If the ERO is a returning ERO, the volume of checks will equal their prior year s volume, plus 25%. If the ERO works with a service bureau, the service bureau may provide supplies directly to the ERO. Additional supplies can be ordered on the TPG website (if applicable) or through the ERO s Service Bureau. These supplies are shipped free using two-business day delivery. The ERO must pay the shipping charges for any next day shipments. If offered, prepaid cards will be shipped with the initial supply shipment if the ERO is approved or opts in to the prepaid card Program in a timely manner (see Card Shipments under Disbursement Methods section). B) Marketing Materials Marketing materials must be special ordered directly through TPG. Marketing materials include banners, posters, postcards, mobiles, and brochures. Examples of the marketing materials available can be seen on TPG s website and can be ordered online. All marketing materials provided by TPG may only be used for the purposes originally intended. If the ERO intends to develop or has developed their own marketing materials, whether online or in print, the materials must adhere to TPG s marketing standards and be approved in writing by TPG prior to use. All marketing materials provided by TPG may only be used for the purposes originally intended. TPG s logos and trademarks are copyrighted materials and shall not be used except as authorized by or with the express written permission of TPG. The ERO is restricted from using misleading statements about any of TPG s products in their advertising or representation of the products, such as: Instant tax money or Get your refund fast or Rapid refund or statements that TPG products are offered by someone other than TPG. The ERO must avoid product confusion. If they have questions or concerns in reference to marketing materials and their compliance to TPG s guidelines, please call and ask for the Marketing Department. The TPG marketing department has worked hard to create marketing campaigns that comply with consumer protection laws. The ERO can count on TPG to provide approved marketing materials. TPG has marketing materials available for each office, so the ERO can easily ensure materials are up to date. UDAAP COMPLIANCE UDAAP, stands for unfair, deceptive, or abusive acts or practices. Federal financial regulators have included unfair, deceptive and abusive practices within regulatory examinations and enforcement actions. The following defines unfair, deceptive, and abusive practices: An act or practice is unfair when: It causes or is likely to cause substantial injury to consumers; 2018 User Manual, B, January of 36

11 The injury is not reasonably avoidable by consumers; and The injury is not outweighed by countervailing benefits to consumers or to competition. An act or practice is deceptive when: The act or practice misleads or is likely to mislead the consumer; The consumer s interpretation is reasonable under the circumstances; and The misleading act or practice is material. An act or practice is abusive when it: Materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or takes unreasonable advantage of A consumer s lack of understanding of the material risks, costs, or conditions of the product or service; A consumer s inability to protect his or her interests in selecting or using a consumer financial product or service; or A consumer s reasonable reliance on a covered person to act in his or her interests. The ERO is expected to be familiar with UDAAP compliance as set forth above and must make sure that their advertising and customer interactions are UDAAP compliant. DESCRIPTION OF REFUND PROCESSING SERVICES A) IRS Direct Deposit and IRS Paper Check IRS direct deposit and IRS paper check are not TPG s financial products but they are important FREE alternatives that the ERO must explain to the taxpayer, prior to explaining any TPG services. Taxpayers who file their tax return electronically can choose to have the IRS deposit their refund directly to their bank account or have the IRS mail a check to the address on their tax return. There is no charge to the taxpayer for this service. A direct deposited refund will arrive in less than 21 days (similar to the time it takes for TPG to process the refund). An IRS check will take 2-3 weeks to arrive. The difference between the IRS products and TPG services is that the IRS cannot make deductions from the refund to pay third party fees on behalf of the taxpayer. If the taxpayer chooses IRS refund processing, the taxpayer must pay tax preparation fees out of pocket at the time their taxes are prepared. Again, the ERO should explain these no-cost alternatives to the taxpayer before offering TPG s products. These alternatives are also listed on the front page of the RT Application and Agreement. B) IRS Required 7216 Consent Forms The IRS has implemented IRS Rule 7216 to mandate that tax preparers obtain TWO (2) written consents from the taxpayer to use and disclose their tax information. These are very specific forms with very specific requirements as to timing and content: 1) CONSENT TO USE TAX RETURN INFORMATION. This form is required to allow the tax preparer to use the taxpayer s tax information to determine if TPG products are available to the taxpayer. This form is provided to you as a courtesy on the TPG website, under the Downloadable Forms section. The ERO should print copies of this form for use 2018 User Manual, B, January of 36

12 during the tax season if the forms are not provided through the software. The ERO is required to provide to each taxpayer prior to discussing any TPG products. The ERO should have each taxpayer sign the consent form as soon as a tax refund amount is established. If Taxpayer Advance is being offered, a separate Consent to Use for Taxpayer Advance is required, in addition to the standard Consent to Use. 2) CONSENT TO DISCLOSE TAX INFORMATION. This form is required to allow the tax preparer to disclose the tax return information to a third party (i.e., TPG) if a TPG product is selected. This consent form will print out with the Program documentation. The ERO is required to have each taxpayer sign this document before the taxpayer signs their tax return, and before submitting the tax return. If Taxpayer Advance is being offered, a separate Consent to Disclose for Taxpayer Advance is required, in addition to the standard Consent to Disclose. Both of these consent forms are provided to the ERO as a courtesy by TPG. It is highly recommended that the ERO seek professional counsel as to their legal sufficiency as a tax preparer. Also, the transmitter may provide the ERO with different forms. Provide a copy of both the signed consents to the taxpayer. C) Refund Transfer (RT) A Refund Transfer ( RT ) is not a loan, it is a refund processing service provided through TPG. When the taxpayer selects an RT, they direct the IRS to deposit their tax refund into a temporary account at the Bank. When the Bank receives the IRS refund (less than 21 days from the filing date), TPG makes deductions from the refund to pay the ERO s fees and TPG fees. The balance of the refund is then disbursed to the taxpayer by way of a check printed in the ERO s office (unless another disbursement method is chosen). TPG receives deposits from the IRS on a daily basis but primarily one major deposit each week on Wednesday. Upon IRS funding, TPG will generate check print authorizations for all the ERO s clients that funded in that cycle. Large volume offices should prepare for the high volume of foot traffic that might occur on a single day as RT customers come in to pick up their checks. If TPG does not receive an IRS refund on behalf of a taxpayer who selects a TPG product, no fees including the tax preparation fees charged by the ERO will be paid. In the case of such unfunded returns, the ERO must collect their fees directly from the taxpayer. The ERO can check on the status of a taxpayer s IRS refund using the TPG website. A small percentage of refunds are funded one week past their expected funding date. If the refund is not received more than one week past the expected IRS funding date, the ERO should contact the taxpayer directly to collect the preparer fees. 1) Procedure for Offering a Refund Transfer Once the RT option is selected, the software will print out all the required documentation. The taxpayer must sign all documentation, including the IRS 7216 Consent Forms before the ERO transmits the tax return and the RT request. The documentation will consist of the RT Application and Agreement, an RT Fee Disclosure form, and the 7216 Use and Disclosure Consent forms. The ERO MUST provide a copy of the RT Application and Agreement, Fee Disclosure, Bank Privacy Policy and the 7216 Use and Disclosure Consent forms to the taxpayer and also retain copies of this documentation. Copies of this documentation will be asked for if your office is reviewed by TPG. You will be subject to 2018 User Manual, B, January of 36

13 corrective action, including inactivation from the program, if you are unable to produce copies of signed documentation when asked. 2) State Refund Transfer (SRT) If the taxpayer is interested in this option, TPG will process the taxpayer s state refund transfer ( SRT ) in the same way the federal RT is processed. If an SRT is filed with a federal RT, make the appropriate indication in the software. On the TPG RT Application and Agreement, the SRT has its own check box. It must be checked if the SRT is filed. The SRT will be disbursed using the same method used for disbursing the federal RT. If a state refund is received before a federal refund, all fees except the fee for processing the second refund will be deducted from the state refund. D) Fee Collect (FC) Payment Options (Check with your software provider for availability. You cannot offer the Fee Collect Program and the traditional RT program out of the same office.) The Fee Collect program provides two options for paying tax preparation fees: 1) pay by refund (the so-called Fee Collect method), or 2) pay by ACH direct debit of the taxpayer s bank account ( Fee Pay ). The integration of the Fee Collect or Fee Pay options in participating tax preparation software packages allows for simple payment processing and management of accounts receivable. All fees other than the fee charged by the ERO for preparing the taxes are deducted and paid from the tax preparer fee. 1) Pay By Refund When the taxpayer chooses to pay their tax preparer fees via the refund, they direct the IRS to deposit their tax refund into a temporary account at Bank. When Bank receives the IRS refund (less than 21 days from the filing date), TPG makes a deduction from the refund to pay the ERO s fees. The balance of the refund is then disbursed to the taxpayer by way of an ACH direct deposit to the account designated by the taxpayer and ERO. Fees will be paid to the ERO within 24 hours of receipt of IRS funding. If TPG does not receive an IRS refund on behalf of a taxpayer who selects a TPG product, no fees including the tax preparation fees charged by the ERO will be paid. In the case of such unfunded returns, the ERO must collect their fees directly from the taxpayer. The ERO can check on the status of a taxpayer s IRS refund using the TPG website. A small percentage of refunds are funded one week past their expected funding date. If the refund is not received more than one week past the expected IRS funding date, the ERO should contact the taxpayer directly to collect the preparer fees. 2) Pay by ACH Direct Debit The Fee Pay program is offered as part of the Fee Collect program. Fee Pay allows for the taxpayers to pay tax preparation fees via ACH direct debit from their bank account. Taxpayers must have a personal bank account to apply for Fee Pay. Fees are deducted after the tax return is filed by the preparer and accepted by the IRS. If an ACH direct debit is refused or rejected, the tax preparation fees are not paid and the taxpayer must make arrangements to pay the fees directly to the tax preparer. The direct debit cannot be used to pay amounts owed to the IRS. IRS or state tax payments must be made directly by the taxpayer to the applicable tax authority User Manual, B, January of 36

14 3) Procedure for Offering a Fee Collect Once the FC option is selected, the software will print out all the required documentation. The taxpayer must sign all documentation, including the IRS 7216 Consent Forms before the ERO transmits the tax return and the FC request. The documentation will consist of the Tax Refund Deposit and Payment Authorization form, and the 7216 Use and Disclosure Consent forms. E) Taxpayer Advance (Check with your software provider for availability. EROs cannot offer the Taxpayer Advance unless specific due diligence criteria has been met. Not all EROs qualify.) Taxpayer Advance is a tax refund advance program available to qualifying EROs and taxpayers. Not all EROs are eligible to offer this program to taxpayers. If eligible, EROs can offer taxpayers a Fast Cash Advance up to $1,500, plus an additional Advance Plus tax refund advance of $1,000, which will be paid back upon IRS or state funding. TPG has partnered with a third party refund advance provider to offer this product for all EROs except those located in Puerto Rico. The third party advance provider is not affiliated with TPG or Bank. Tax refund advance proceeds are disbursed onto one of the most popular prepaid cards in the nation -- the Walmart MoneyCard offered by Green Dot Bank or by cashier s check. Other key aspects of the Taxpayer Advance program include: The ERO is charged up to $60.00 for each funded Taxpayer Advance. This fee is deducted from ERO s tax preparation fees. EROs are prohibited from passing the taxpayer advance fee on to the taxpayers who express an interest in obtaining a Taxpayer Advance. EROs may factor this expense in generally as they consider tax preparation price increases applicable to all taxpayers as they evaluate annual fee increases each year. An RT is not required with Taxpayer Advance. That means a taxpayer can receive a Taxpayer Advance and no RT and then must pay out of pocket for tax preparation fees. There is an additional Tax Refund Deposit and Payment Authorization form which is used for this purpose in lieu of the RT Application and Agreement. The Tax Refund Deposit and Payment Authorization form contains a taxpayer authorization for a bank account to be opened to receive the federal and if applicable, state tax refunds and to deduct the Taxpayer Advance amount from the refund amount(s). Separate 7216 Consents to Use and to Disclose for Taxpayer Advance must be used if the taxpayer expresses an interest in obtaining a Taxpayer Advance. The standard 7216 Consents to Use and Disclose for RTs must also be used if an RT is offered. Taxpayer Advance proceeds and tax refund proceeds will be disbursed onto a Walmart MoneyCard or cashier s check. Under certain Programs, a specially-branded prepaid card issued by Green Dot Bank may be used instead of the Walmart MoneyCard. EROs shall incorporate tax preparer scripts regarding the Taxpayer Advance program that are provided by TPG in their tax preparer training in connection with offering the Taxpayer Advance program. F) Taxpayer Identification Under the TPG-required CIP procedures for TPG products, each taxpayer must be properly identified. The ERO must inspect unexpired government-issued photo ID and SSN for each 2018 User Manual, B, January of 36

15 taxpayer and confirm the identity and SSN of each dependent. Copies of the identification should be retained unless prohibited by law. The ERO will also be required to obtain the mailing address and physical residence address for each taxpayer as part of the electronic record. Once the ID has been checked and the documentation is signed, the tax return and RT request can be transmitted. TPG should receive the taxpayer s IRS refund and TPG will transmit a disbursement record to the ERO. If the taxpayer selected a check disbursement, the ERO will be able to print a check at that time. If the disbursement is by direct deposit or prepaid card, the funds will be available within 1 to 2 business days. If the taxpayer has an outstanding Taxpayer Advance, the outstanding amount may be deducted from the refund before all fees have been deducted and before any disbursement is made to the taxpayer. DISBURSEMENT METHODS If the taxpayer has a refund due on their tax return and the taxpayer has requested TPG to process their refund, the taxpayer must choose the manner in which they want their refund proceeds disbursed. Once a disbursement method has been selected, all subsequent disbursements will be made in the same way. The following disbursement methods are available for RTs: Site Printed Cashier s Checks ACH Direct Deposit to a checking account, savings account or filer owned prepaid debit card Walmart MoneyCard or other branded Green Dot Bank-issued prepaid debit card (if ERO qualifies) Walmart Direct2Cash Depending on what software provider you use, Fee Collect disbursements may be limited. Check with your software provider to determine what options your program provides. If the disbursement option needs to be changed, the ERO is required to contact TPG so that the request can be processed per policy. A) Site Printed Cashier s Check Upon acceptance into TPG Program, EROs will be able to print TPG cashier s checks directly from their office. The check print program is integrated into the software program the ERO uses to prepare taxes. Authorization to print checks will be transmitted from TPG to the ERO through the ERO s transmitter. TPG will send a check print authorization to the transmitter after receiving a tax refund from the IRS. Each time the ERO connects to the transmitter, the transmitter will transmit all pending check print authorizations to the ERO. Upon receipt of the check print authorization, the ERO should be able to print checks. Any check printing problems should be directed to the transmitter/software provider. The transmitter will provide all technical support for the checkprinting program. Most RTs will result in one or two check disbursements; however other products such as a State Refund Transfer may generate additional check disbursements. Check print disbursements may not all occur on the same day so the taxpayer may have to make multiple trips to the ERO s office to pick up all checks User Manual, B, January of 36

16 In certain cases (such as the printing of a third check) during and after the tax season, TPG may print and mail checks directly to the taxpayer. Checks will be printed for the refund amount less any fees withheld and are normally mailed using first class postage. 1) Description of the Check and Check Stub Each check has an attached stub. The stub is initially blank (some software exceptions). Your software will print the correct disclosure on the stub. Once printed, you are required to give the taxpayer the check with the stub attached. In the case of an RT or overage check, an itemization of the RT or overage will print. You should make a copy of the check with the stub attached before handing the check to your customer and you should keep a copy of the check and stub in client s file. Taxpayer Names Should Match Check Payee: It is extremely important to check the taxpayer s identification against the tax return file in order to ensure that the proper check is handed out to the proper client. If the check is used to disburse proceeds to taxpayers that filed jointly, both taxpayers names must appear as the payee on the payee line. A check log is available for download from our website. Using this check log can help you to avoid giving a check to the wrong customer. On the top portion of the reverse side of the check there are two endorsement lines. There must be valid and legal endorsements for all payees listed on the front of the RT check. On joint returns, both taxpayers must sign. The only exceptions are where a taxpayer has died or where a Power of Attorney has been presented. See the Check Exceptions section later in this manual for more detailed information on endorsements. ERO Liability for Check Errors: If you hand out a check to the wrong client and that check clears and TPG is unable to get funds back on the check, you will be responsible to TPG for the amount of the check (see the FSA). 2) Check Shipments Check stock may be distributed directly from TPG, from the transmitter or from a Service Bureau. The origin of the shipment is predetermined through contractual arrangement. Please be extremely careful to verify check stock shipments against your packing slip and be alert to any signs of tampering. Because delivery times are not always predictable, it is strongly recommended that an accurate assessment of check stock be made prior to the beginning of tax season. If checks are shipped direct from TPG, a packing slip will be included with each shipment. It will identify: (a) the billing and shipping address, (b) the total number of checks shipped, and (c) the check sequence number range of the shipment. A shipment receipt and tracking number will be kept on file at TPG. If checks are shipped from the transmitter or service bureau, checks are shipped to EROs based on procedures established by the transmitter or service bureau. 3) Check Storage and Security The check stock on which the taxpayers RT checks are printed are Bank cashier s checks. Cashier s checks carry more credibility and authority than ordinary check stock. They also, 2018 User Manual, B, January of 36

17 however, carry significantly more responsibility and require more care in handling. The following outlines the minimum care required to maintain check stock: Checks must be stored in a secure area under lock and key, just as you would store cash or personal checks. Access should be allowed to authorized personnel only. If checks need to be transported from one location to another, the checks should not be left in an unattended car. A check log will be maintained on a daily basis by the ERO. Entries will be required each time that check stock is removed from storage and when a check is voided. Comparisons between check sequence numbers printed, voided, and remaining stock should be made, as unused checks are returned to storage. Every exception should be documented. If a check is discovered to be missing, notify TPG customer support immediately. Specific check sequence number ranges will be tracked for each site. For this reason, transfer of check stock from one site to another, even if the sites are affiliated with the same company, is prohibited unless authorized by TPG. Reorder requests must be completed through TPG s website, Check Stock Reconciliation: An end of season reconciliation will be required, accounting for all checks issued, voided, canceled, destroyed or remaining unused. Unused checks must be mailed back to TPG or destroyed. If the check stock is destroyed, the ERO must fax TPG a completed Check Stock Reconciliation Form. This form can be downloaded from the TPG website. Misused or unaccounted for check stock is the responsibility of the preparer and misuse is considered cause for termination from the RT program. 4) Check Handling Exceptions Lost or Stolen Check Stock: What to do if the ERO loses blank check stock or blank check stock is stolen: a. ERO should immediately call TPG and report the check numbers from the missing check stock. Voiding and Reissuing Checks: What to do if checks are accidently damaged, torn, or used out of sequence by the ERO prior to disbursement to the taxpayer: a. Write VOID across the face of the check. Do not alter the check in any other way. b. Enter the voided check sequence number in the EROs check control log. c. Forward the voided check immediately to TPG or destroy the check and record the check number on the Check Stock Reconciliation form. d. Follow your transmitter s procedures for skipping check sequence numbers. When checks are damaged after disbursement to the taxpayer and are in a condition that renders the check non-negotiable: a. Write VOID across the face of the check. Do not alter the check in any other way User Manual, B, January of 36

18 b. Enter the voided check sequence number in the ERO s check control log. c. Forward the voided check to TPG along with a check re-print request. d. After receiving the check and re-print request, TPG will send another check print record down line (during tax season) or will mail the check directly to the taxpayer. With special instructions, we will send it to the ERO s location for customer pick up. Indemnity Bonds for Lost Checks: What to do if a taxpayer loses an unendorsed check: a. If the check has cleared, Forgery Procedures should be followed. b. The ERO completes the tax preparer portion of the Indemnity Bond with all the information requested. c. The taxpayer (joint filers must both be present) completes and signs the second portion of the Indemnity Bond. The ERO will act as a witness. d. After the Indemnity Bond is completed, it is faxed to TPG. The original copy of the Indemnity Bond should be mailed to TPG. e. TPG reviews the Indemnity Bond to verify that it has been completed properly and verifies taxpayer s home telephone number and address. A check will not be reissued until the taxpayer can be contacted. f. TPG verifies that the missing check has not cleared. A stop payment is placed on the original check after 10 business days from the date of issue and a new check print authorization is generated. A check re-issue request will be denied if the check has cleared. g. TPG prints a new check at its location and mails the check directly to the taxpayer or, with special instructions, will send it to the preparer s location for customer pick up. What to do if a taxpayer loses an endorsed check: Because an endorsed Cashier s Check is a negotiable instrument, a check re-issue request can only be processed 20 business days from the date of issue. At that time, the following procedures will apply: a. If the check has cleared, Forgery Procedures should be followed. b. After it is determined that the check has not cleared, an Indemnity Bond for endorsed checks should be completed. An Indemnity Bond can be obtained by contacting TPG. c. The taxpayer (joint filers must both be present) completes and signs the second portion of the Indemnity Bond. The ERO will act as a witness. d. After the Indemnity Bond is completed, it is forwarded to TPG. A copy of the Indemnity Bond should be retained by the ERO. e. TPG reviews the Indemnity Bond to verify that it has been completed properly and verifies taxpayer s home telephone number and address. A check will not be reissued until the taxpayer can be contacted. f. TPG verifies that the missing check has not cleared. After 20 business days a stop payment is placed on the original check and a new request is generated. A check reissue request will be denied if the check has cleared. TPG prints a new check at its location and mails it to the taxpayer directly or, with special instructions, will send it to the ERO s location for customer pick up User Manual, B, January of 36