Topic: Health Savings Accounts
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If a customer used a health savings account (HSA) to cover an overdraft in another account, is that a prohibited transaction? If so, should we correct our IRS filings?
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While we are not qualified to comment on the consequences of correcting your IRS filings, we believe that you should correct any inaccurate information reported to the IRS. IRS Notice 2008-59 states that the sanction for a prohibited transaction (such as borrowing from or lending to the HSA) is disqualification of the account as an…