Happy New Year everyone out there in blog land. As we close out the first week of 2008, everyone puts their focus from friends and family to all those bills and debt that piled up during the holidays. Many use their tax refunds to pay down those bills and they also request refund anticipation loans (RAL’s) when their taxes are prepared to get the money quicker. If you are not familiar with RAL’s check out this post from last year for more details.
Well the news coming from the IRS regarding RAL’s may finally stop the tax preparation shops (H&R Block, Jackson Hewitt, Liberty Tax) from offering these products because doing so encourages fraud. According to acting IRS Commissioner Linda Stiff, because the loans are often limited to the size of refunds, unscrupulous tax preparers might be tempted to inflate refunds to collect higher fees.
It is good to see that the IRS and Treasury Department are finally stepping in to regulate this part of the industry. I hope that this change is implemented swiftly.
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