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Mark Baumgartner. Liberty Tax ServiceThe Instant Cash Advance program offered in 27 states last year by Liberty Tax Service as a test is being cut back. The program will go forward in 21 states during the upcoming tax season, Liberty said this week during an earnings webcast for its parent, JTH Holdings.

The decision to cut back was made by the company providing the financing, according to CFO Mark Baumgartner. Liberty did not give the name of the states or the reason for the cutback, but speculated the decision could be related to new loan regulations since the consumer loan program is regulated by states. The company was not named, but has previously been identified in published reports as Meta financial.

However, despite the still small size of the program, Liberty appears to be committed to its continuation and development. ICA was developed in response to the end of Refund Anticipation Loans under pressure of government regulations.

"We believe this gives us a strong advantage because we are the only company to coffer tax settlement loans to our clientele," says Baumgartner.

Last year, Liberty also offered a credit card that was secured against anticipated tax refunds. The program was approved by the Office of the Comptroller of the Currency too late to be offered for the full season. The OCC is currently reviewing the program to make sure it is consistent with all policies. While Liberty expects approval, Baumgartner said franchisees are being told not to expect its availability early in the season.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Last modified on Tuesday, 10 December 2013
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