My sister had the exact same issue last year! Her refund went through "Santa Barbara TPG" which is another one of these temporary bank accounts. Turns out her preparer was adding a $150 "processing fee" that she never disclosed verbally. The paperwork mentioned it in tiny print on page 4 of something she quickly signed. When my sister confronted her, the preparer claimed it was "standard industry practice" and refused to refund anything. She reported her to the state board of accountancy and switched tax preparers.

This is definitely a red flag situation. As others have mentioned, legitimate refund transfers should be clearly disclosed with proper documentation. The fact that your SSN is embedded in an unknown bank account number is particularly concerning from an identity protection standpoint. I'd recommend taking these steps immediately: 1. Get your official IRS transcript to compare the actual refund amount with what you received 2. Look through all your tax paperwork for any mention of refund transfer fees or Metabank authorization 3. Consider placing a fraud alert on your credit reports since your SSN was used in ways you weren't aware of Even if the dollar amounts match up, the lack of proper disclosure about routing your refund through a third-party account is problematic. This could be a case where the preparer is legitimate but has poor business practices, or it could be something more serious. The transcript will help you determine which situation you're dealing with. If you discover any discrepancies or unauthorized fees, definitely report this to the IRS Office of Professional Responsibility and your state's board of accountancy if applicable.

Just a caution - don't assume the refund is correct without verification! I had something similar happen and just cashed the check, thinking "cool, free money!" Two years later I got hit with an even bigger bill because they discovered their error. If you cash a refund check you're not entitled to, you'll eventually have to pay it back WITH INTEREST.

This is exactly why I always recommend keeping detailed records of everything when dealing with IRS notices. In your case, since you submitted documentation correcting one of the income amounts, it's very possible they made adjustments beyond what you specifically addressed. Here's what I'd suggest: Don't cash any refund check until you get a complete explanation of their calculations. Request a detailed breakdown by calling the IRS or writing to them - you have every right to understand how they arrived at this figure. Also, go back through your 2021 tax documents and double-check for any withholding on those missed income sources, as others mentioned. Look for boxes 4 and 6 on any 1099 forms, and check if there were estimated tax payments you made that year that might not have been properly credited to your account. The fact that you went from owing money to getting a $1,378 refund suggests they found something significant beyond just the income correction you submitted. Better to be safe and verify everything now than deal with interest and penalties later if there was an error.

FYI - it's actually better to have refunds direct deposited to your account instead of having checks sent through preparers. Always use your own bank info, never let them handle your money. Good luck getting this resolved.

This is absolutely infuriating and unfortunately way too common. As someone who works in financial services, I can tell you that what they're doing is 100% illegal. The moment that refund check was issued in your name, it became your property - not theirs to hold hostage. Here's what I'd recommend doing immediately: 1. Send them a written demand (certified mail) stating they have 24 hours to release YOUR check 2. Contact your state's consumer protection agency 3. File a complaint with the IRS Return Preparer Office 4. If they're part of a franchise, escalate to corporate immediately The fact that they suddenly said you could pick it up after mentioning the IRS tells you everything you need to know - they KNOW they're in the wrong. Don't let them get away with this predatory behavior. Document everything and make sure to warn others about this place once you get your money back. You shouldn't have to wait weeks for new SS cards when they already had sufficient documentation to file your return successfully. This is pure intimidation tactics.

I'm in a similar situation but with a twist - I'm a German citizen with a US corporation, but I do take a small salary. My accountant filed Form 5472 but made a mess of it and now I'm dealing with follow-up questions from the IRS. Has anyone used TurboTax or any other software for this form? My accountant wants to charge me another $1500 to fix the issues he created.

I went through this exact scenario last year as a Canadian founder with a US-incorporated startup. Your accountant is absolutely correct to include Form 5472. The key issue that many founders miss is that even unpaid work constitutes a "reportable transaction" under current IRS rules. When you're making business decisions, developing strategy, or doing any work for your corporation without compensation, the IRS considers this a service provided by a foreign related party (you) to the US corporation. This triggers the Form 5472 requirement regardless of whether money changes hands. The "no reportable transactions" exception that you found is much narrower than it appears. It really only applies if you're a completely passive investor with zero involvement in business operations. Since you're the founder actively running the company, you definitely have reportable transactions. I'd recommend filing the form as soon as possible. If you're late, you can request penalty abatement based on reasonable cause - the fact that you genuinely misunderstood the requirements and sought professional advice can help your case. The $25,000 penalty is no joke for a bootstrapped startup, but acting quickly and showing good faith effort to comply usually results in reduced or waived penalties. Your accountant may be from a smaller firm, but they're giving you correct advice on this one. Better to file it properly now than face the consequences later.

Has anyone used the "safe harbor" rule to avoid this whole issue? I think if you withhold 100% of your previous year's tax liability (or 110% if your AGI was over $150k), you don't have to worry about penalties regardless of bonuses, right?

Great advice in this thread! I want to add one more consideration - timing matters a lot when you receive your bonus. If you got it late in the year (like Q4), the allocation method on Form 2210 Schedule AI becomes even more beneficial because it shows the IRS that you couldn't have reasonably withheld enough earlier in the year when you hadn't received that income yet. I had a similar situation with a December bonus that pushed me into underpayment territory. The standard calculation assumed I should have been withholding for that income all year long, but the allocation method properly showed that the income (and corresponding tax liability) only existed in Q4. One tip: keep really good records of your pay dates and withholding amounts by pay period. You'll need this info whether you're using tax software or tools like the ones mentioned above. Having everything organized makes the whole process much smoother.