January 3, 2011
H&R Block has announced it won’t offer refund anticipation loans this year. RALs have been criticized for imposing high costs on consumers while providing little benefit. H&R Block’s action was based on loss of their funding arrangement, however, rather than ethical concerns.
Jackson Hewitt and Liberty Tax Service intend to continue offering the controversial loans.
October 19, 2010
Today’s Wall Street Journal reports that H&R Block has filed suit against a unit of HSBC that is balking at its commitment to provide refund anticipation loans for Block’s customers. As we reported in August, the IRS has announced it will no longer provide “debt indicators” that are a key piece in the processing of these loans because the loans are unnecessary now that the IRS is able to process refunds in a matter of days. Block’s suit alleges that HSBC is using this development as an excuse to get out of a prior commitment when the real reason is that the bank simply doesn’t want to be in this business.
The RAL industry is highly profitable but often criticized for persuading people, especially those with modest income, to take expensive loans that make tax refund money available only a few days faster.
August 19, 2010
Last month we reported on proposed regulations that would impose an annual user fee on paid return preparers in connection with an application for and renewal of a preparer tax identification number (PTIN). At that time we knew the IRS would receive $50 and applicants would pay an additional amount to cover the cost of a third-party vendor to operate the online system and provide customer support. The IRS has announced that the system will go live in mid-September, and the total fee for 2011 will be $64.25. This fee may change in future years as costs are re-evaluated.
This is an annual fee and will apply to all compensated return preparers, including registered tax return preparers, enrolled agents, CPAs and attorneys, even if they already have a PTIN.
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