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Posted by Mark Bole on April 7, 2008, 9:20 am
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Elle wrote:
>> Elle wrote:
>>> IRS Pub 1345, page 44 states: "The [E-file] provider
>>> must... advise taxpayers that [Refund Anticipation Loans]
>>> are... not a quicker way of receiving refunds from the
>>> IRS."
[...]
> Even if it was, by my reading 4 (c) and (d) "undo" any such
> advice.
There does not appear to be any IRS regulation prohibiting the "undoing"
in your eyes of advice required to be given.
[...]
> Han, I think you misunderstood the meaning of the words I
> had in [ ].
The brackets had nothing to do with it. He was trying to make the
distinction between a refund on the one hand, and a loan which is
clearly called a loan, on the other. Ditto for GSalisbury.
To answer your original question, why not visit the IRS web site and
search for "compliance enforcement". This issue does not appear to be
on their radar, at least not publicly. Do you suppose all those other
attorneys general you referred to might have some mixed motives for
going after Block, just like Spitzer did when he was one?
Anyway, here is what the IRS says in Form 9325:
"A refund anticipation loan is a loan made to you based on the refund
you expect to receive. This loan is a contract
between you and a lender. The IRS is not involved in this contract,
can't grant or deny the loan, and can't answer any
questions about it. If you have any questions about a refund
anticipation loan, contact your electronic filer or the
lender."
I would not recommend RAL's to anyone, nor would I recommend junk food,
reckless driving, tugging on Superman's cape, pulling the mask off that
old Lone Ranger [a.k.a. "loan arranger", thanx Harlan!], and messing
around with Jim. But there's no point in fretting if people do those
things anyway.
-Mark Bole
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Elle on April 7, 2008, 4:14 pm
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> Elle wrote:
>>> Elle wrote:
>>>> IRS Pub 1345, page 44 states: "The [E-file] provider
>>>> must... advise taxpayers that [Refund Anticipation
>>>> Loans] are... not a quicker way of receiving refunds
>>>> from the IRS."
> [...]
>> Even if it was, by my reading 4 (c) and (d) "undo" any
>> such advice.
>
> There does not appear to be any IRS regulation prohibiting
> the "undoing" in your eyes of advice required to be given.
>
>
> [...]
>> Han, I think you misunderstood the meaning of the words I
>> had in [ ].
>
> The brackets had nothing to do with it. He was trying to
> make the distinction between a refund on the one hand, and
> a loan which is clearly called a loan, on the other.
> Ditto for GSalisbury.
Oh, I see your and their point now. I remain doubtful that
this leger-de-main of wording that HR Block uses does not
violate the IRS rule. Not to be stubborn; more that I have
been reading about RALs (and one client's contract with HR
Block) and my eyebrow went up at this statement in her Block
paperwork.
> To answer your original question, why not visit the IRS
> web site and search for "compliance enforcement". This
> issue does not appear to be on their radar, at least not
> publicly.
It is on their radar. That's why the IRS has these rules.
Google and/or see reports like
http://www.irs.gov/pub/irs-utl/2007_objectives_report_vol_ii_ral_final.pdf ,
which says in part:
"With the advent of the earned income tax credit (EITC) and
electronic filing, tax refunds have become big business. The
EITC is a government benefit to low income workers, many of
whom have children. Because approximately 56 percent of
Refund Anticipation Loan (RAL) consumers also claim the
EITC, there is a government interest in delivering this
means -tested benefit to the beneficiary without
intermediaries
siphoning off fees. Moreover, because approximately ten
percent of the population is unbanked,2 and financial
literacy leads to asset building and provides a path out of
poverty, the government has an interest in encouraging
unbanked persons to enter the financial mainstream. Since
tax refunds are often the taxpayer's largest lump receipt
during the year,3 a major focus of "banking the unbanked"
should center on taxpayers receiving refunds."
> Do you suppose all those other attorneys general you
> referred to might have some mixed motives for going after
> Block, just like Spitzer did when he was one?
For all the reasons the many consumer sites on RALs list, I
doubt any of the AGs have mixed motives.
When an impoverished, poorly educated parent of four comes
to file income taxes on some $16,000 of income (so a simple
return) and is charged $424 for prep, $30 for a "Refund
Account" with HSBC, $26 as a finance charge, and 36% annual
interest, without understanding that she can get her return
done for free and with only a few more days wait worst case
through efiling with VITA et al., there is a problem.
I will check out the IRS's compliance enforcement. Thank
you.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Han on April 7, 2008, 4:12 pm
Please log in for more thread options @newsfe08.phx:
> Han, I think you misunderstood the meaning of the words I
> had in [ ]. "RAL" is what was in the place of [Refund
> Anticipation Loan] in the original text. Brackets are a
> writing convention to indicate that the original text is not
> being quoted perfectly exactly.
>
Well, I started writing before I realized that, indeed. But when I read
your original post, it seemed clear to me that H&RB were talking about a
loan against the anticipated refund as collateral.
I once got burned by a Citibank offer of no interest for 6 months, and now
even more heed the warning: If it sounds too good to be true, it probably
is too good to be true." Why would H&RB "give" anyone money if the didn't
earn some back?
--
Best regards
Han
email address is invalid
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
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Posted by GSalisbury on April 7, 2008, 4:13 pm
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>> Elle wrote:
>>> IRS Pub 1345, page 44 states: "The [E-file] provider must... advise
>>> taxpayers that [Refund Anticipation Loans] are... not a quicker way of
>>> receiving refunds from the IRS."
>>>
>>> An H&R Block provided "HSBC Bank Application for a Refund Anticipation
>>> Loan" states:
>>
>> A "provided" application? Certainly the taxpayer must have requested it,
>> they don't hand it out to everyone who walks through the door.
>>
>> How do you know the advice required by the IRS wasn't provided prior to
>> receiving the requested application?
>
> Even if it was, by my reading 4 (c) and (d) "undo" any such advice.
>
>> As I recall, there is a client service agreement that everyone signs,
>> which most likely addresses this issue. Do you really think a big ol'
>> target like H&R is going to get tripped up over something like this?
>
>
> Han, I think you misunderstood the meaning of the words I had in [ ].
> "RAL" is what was in the place of [Refund Anticipation Loan] in the
> original text. Brackets are a writing convention to indicate that the
> original text is not being quoted perfectly exactly.
>
> GSalisbury, I am pretty sure that is a distinction without a difference.
> --
I must be completely missing what you're driving at.
Actually, I don't think I ever saw what the complaint was.
H&R Block does someone's taxes and a refund is calculated.
They say "...IRS...takes as much as 12 days..." but hey
(bastardizing your [] convention)
[complete this loan application now and we can give you some money maybe
today!]
I don't see where H&R Block says the IRS refund is any faster.
They say THEY MAY be able to give them an <some> amount faster.
I think that's distinctly different.
Of course the whole concept of RAL's is scam and a sucker bet.
Geo.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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