Our last blog told you how the Internal Revenue Service does not trust clients who have too many bank accounts. Well neither does a mortgage banker! Banks and the IRS look at your income in opposite ways. The IRS believes you are hiding income when you have too many bank accounts. You have to PROVE the transfers to avoid being taxed on additional sales. Mortgage bankers also have a problem with you having too many bank accounts. They believe that you are exaggerating your sales income. You have to PROVE the deposit trail to show where the original source of your income comes from. I had one banker tell me that I could not pay my bills because they only used one bank account to pay my business bills. I was not able to convince them that I was able to pay all my bills by using ALL my bank accounts. So I was turned down for a loan and had to look for another bank who could understand my having so many bank accounts.
…..So in summary, neither the IRS or Banks want to see many bank accounts. They prefer one or two ONLY. IRS thinks you underestimate your income and the BANKERS think you overestimate your income by using so many bank accounts. Keep really good records and I repeat, DO NOT TRANSFER money between accounts if you want to win your audit with both the INTERNAL REVENUE SERVICE and also your MORTGAGE BANKER!!! Henry – Founder.