User's Manual - Drake Software

Drake Software User’s Manual
Franchise/Network Requirements
Franchise/Network Requirements
Bank Products
If your firm collects tax returns for e-filing from outside companies or individuals, it
might be considered part of franchise or network (formerly, a service bureau). Franchises
and networks can be required to provide additional information when applying
for banking services.
A preparer or firm can be considered a franchise or network if:
• The preparer accepts returns from other businesses that the preparer does not own
• A preparer issues Form 1099 for contract labor at other locations
• A preparer contracts with another to provide e-filing and banking options
• A preparer issues W-2s to a non-employee who performs functions as a preparer
Your firm is not a franchise or network if it issues W-2s to employees who are under
direct control of the firm and collect returns at the other locations.
Bank products allow taxpayers a way to pay their preparation fees from their refund
rather than having to pay their fees up front. They also give taxpayers without bank
accounts an alternate way to receive their refund proceeds.
To provide any bank product, the bank sets up a temporary account for direct deposit
of the taxpayer’s refund. Once the IRS deposits the refund into the temporary account,
the bank deducts applicable fees and issues the remaining funds to the taxpayer.
NOTES
The taxpayer must understand that a bank product is not a loan. The
disbursement reflects the actual deposited refund amount, with the
bank, transmitter, and preparer fees deducted.
Banks provide certain products for state refunds. Check with your bank
for a list of eligible states.
Distribution Methods
Bank Product Costs
Bank products include refund checks printed in your office, refunds directly deposited
in your clients’ bank account, and refund deposited onto prepaid debit cards. All of
Drake’s banking partners offer variations of these products. Show your client all bank
documents, explain all costs, and check client ID to verify identity before offering
banking services.
Fees are charged for each method of bank product disbursement. Notify your client
that the following fees can be subtracted from the refund amount:
• Tax preparation fees
• Additional fees (formerly “Add-on transmission fees”)
• Bank fees
Tax Year 2012 213