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Tax Refund Loans - Changes Are Coming

Guest post by: John Clark

Article Overview: Bad news if you’ve relied on getting your tax refund early by using a Refund Anticipation Loan (RAL). The IRS announced last week that it will no longer supply “debt” information about tax payers. Tax preparation companies used that information to “verify” your refund amount which they used determine how much to lend you. They’ll have to find other ways to qualify taxpayers which translates to higher fees and making it harder to get the loan at all.

Tax Refund Loans - Changes Are Coming

Bad news if you’ve relied on getting your tax refund early by using a Refund Anticipation Loan (RAL). The IRS announced last week that it will no longer supply “debt” information about tax payers. Tax preparation companies used that information to “verify” your refund amount which they used determine how much to lend you. They’ll have to find other ways to qualify taxpayers which translates to higher fees and making it harder to get the loan at all.

The ridiculous rates were not the reason the IRS stopped giving out debt information – or so they say. They originally released the information as a way to get taxpayers to apply electronically – and it worked. With about 70% of taxpayers using electronic filing now - and the speed in which they get any refund because of it – the IRS decided to drop the program.

Not that I’m a fan of these loans but this puts the poorer taxpayer, those who don’t have access to the internet or taxpayers who don’t understand or want to file electronically at a disadvantage. Either they’ll end up paying more for “enhanced” tax preparation fees that include electronic filing or they’ll have to go back to waiting for the check to arrive in the mail.

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Article Tags: irs loans, RAL, refund anticipation loan, tax loans, tax refund loans
Referred by: http://www.franchisefix.com/



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