The CEOs of the three leading tax preparation chains, H&R Block, Jackson Hewitt Tax Services and Liberty Tax, have written that the Internal Revenue Service's actions on Refund Anticipation Loans will end up costing taxpayers more money. The statement was made in a blog on CNBC and was signed by Alan Bennett, Harry Buckley and John Hewitt, CEOs of the respective companies.
The three cited the action last year by the IRS to drop the debt indicator, which banks had used in their underwriting of RALs to limit risk. The trio wrote, "The federal government is trying to do the right thing for taxpayers who live paycheck-to-paycheck and rely on their tax refunds to help with the basics of everyday living. Unfortunately, initiatives the government recently unveiled will only hurt those people by limiting taxpayers' access to their own information, reducing their choices and increasing their costs."
The post noted that the loans "serve as a lifeline for 8 million people annually." The statement said the cost of loans wase likely to increase and it continued that about 25 percent of the country's taxpayers lack bank accounts. The CEOs also said that the reports that the Treasury Department would allow the IRS to select a bank for taxpayers and deposit refunds into those accounts would still not provide access to funds fast enough.
"Attempts to minimize the use of refund anticipation loans will not eliminate the need or demand for these products. The unintended consequence likely will be that taxpayers will seek unregulated credit alternatives - which typically cost even more," the blog entry stated.
Last modified on Sunday, 02 June 2013