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Posted by Barry Margolin on April 8, 2008, 4:14 pm
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> @nlpi064.nbdc.sbc.com:
>
> > I think it boils down to, you can call a refund a refund, you can call a
> > loan a loan, but you can't call a loan a refund and say it's a "faster"
> > refund.
> >
> > -Mark Bole
> >
> That's the essence of it. Calling a loan a refund should (is?) against the
> law, at least in NY. So HRB calls it a RAL. But it is still a loan, at
> excessive interest rates, and with the refund as collateral. What does
> SOOL mean again?
But the poor saps who fall for this don't really care what it's called,
it's just money, and they're getting it a few weeks earlier than they
would otherwise.
So it seems like this IRS rule doesn't really protect anyone. Most
people who understand the difference between a loan and a refund would
proably notice the fine print about the interest rate even if HRB used
the wrong term.
--
Barry Margolin, barmar@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
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Posted by Elle on April 8, 2008, 9:48 pm
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> But the poor saps who fall for this don't really care what
> it's called,
> it's just money, and they're getting it a few weeks
> earlier than they
> would otherwise.
In hindsight, I think what may have happened with the woman
I know who used H&R Block is that it was January 11 and she
needed her roughly $3000 refund (largely EITC money)
a.s.a.p. She would have had to wait until at least February
1 to use VITA in my city. Plus she technically should not
have been able to use my city's VITA because she has a small
business with depreciation (so Schedule C, which where I am
VITA does not do routinely).
As probably nearly every regular who posts here knows, folks
like this are typically scared of the complexity of taxes.
At best, they may know something about audits: Those who
take the EITC are more likely than those who do not (all
other things equal) to be audited. I would think these folks
feel using a professional tax preparer gives them some
protection.
The occasional fraudulent taxpayer aside, I think these
people are not "saps." They are in a desperate situation
without the education to cope. I think the IRS does "get
it," hence all the discussion at the IRS site and others
about RALs. Those more in-the-know should get it, too,
because H&R Block et al. are pocketing a sizable chunk of
EITC money (= public welfare money) every year that is
supposed to be going to the more immediate needs of the
families receiving it.
> So it seems like this IRS rule doesn't really protect
> anyone. Most
> people who understand the difference between a loan and a
> refund would
> proably notice the fine print about the interest rate even
> if HRB used
> the wrong term.
I found it interesting that Block presents the interest rate
and other fees very clearly. They are in large type, put on
a page with just these items, and followed by a signature
page. I think this method of presentation is likely a result
of the IRS and various state attorneys coming down on Block.
Blah blah I know: Life is lousy for lots of folks.
--
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<< 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 Mark Bole on April 8, 2008, 11:24 pm
Please log in for more thread options Elle wrote:
[..] Plus she technically should not
> have been able to use my city's VITA because she has a small
> business with depreciation (so Schedule C, which where I am
> VITA does not do routinely).
Does VITA *anywhere* routinely do Schedule C, which would apply to a
small business even without depreciation? A person who taught me much
about taxes once opined that if you claim EIC based primarily or solely
on self-employment income, you are almost guaranteed to be audited.
Don't forget bartering (non-cash) income as a basis for claiming EIC,
folks in Humboldt County used to be fond of that... ;-)
-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 kastnna on April 9, 2008, 11:49 am
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> Those who take the EITC are more likely than those who do not (all
> other things equal) to be audited.
I'm not disputing this, but could someone please enlighten me. What's
the logic in this?
P.S. - I don't know much about the EIC other than the very basics, so
please "talk slowly".
TIA
--
<< ------------------------------------------------------- >>
<< 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 Stuart Bronstein on April 9, 2008, 11:53 am
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>> Those who take the EITC are more likely than those who do not (all
>> other things equal) to be audited.
>
> I'm not disputing this, but could someone please enlighten me. What's
> the logic in this?
I wonder if this has anythinig to do with the statistic I heard that
the IRS is more likely to audit the poor than the rich. After all, the
rich would never cheat on their taxes, right?
Stu
--
<< ------------------------------------------------------- >>
<< 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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