Cash Refunds

If you refund moneys to a cash accounting taxpayer, it's important to do the opposite of what was done when the payment was received (i.e., you need to transfer the payable back to the holding account). The following example should help clarify this situation (this example shows a refund due to a credit balance that occurred as a result of a cancel/rebill).

*Event*	*GL Accounting*	*County Payable Balance*	*County Holding Balance*	*Obligation's Payoff Balance*
Bill segment created	A/R 110 Revenue <100> County Holding <10>	0	(10)	110
Payment received	Cash 110 A/R <110> County Holding 10 County Payable <10>	(10)	0	0
Cancel	A/R <110> Revenue 100 County Holding 10	(10)	10	(110)
Rebill	A/R 27.50 Revenue <25> County Holding <2.50>	(10)	7.50	(82.50)
Payment refunded (via an A/P adjustment)	Cash <82.50> A/R 82.50 County Holding <7.50> County Payable 7.50	(2.50)	0	0

We understand this is tricky, but consider this - when a cash accounting taxpayer makes a payment, the system transfers county holding credit balances to county payable distribution codes in proportion to the amount of the receivable debit amount that was reduced by the payment. Therefore, when cash is returned to the taxpayer, the system should transfer county holding debit balances to county payable distribution codes in proportion to the amount of the receivable credit that was reduced by the refund.

Note:

The above takes place when an A/P adjustment is created if the related adjustment type references the appropriate FT algorithm (refer to adjustment FT algorithm used for adjustments that behave like payments.