H&R Block is, at present, the nations leading retail tax Preparation Company. Come tax season, hordes of taxpayers inhabit its storefront office lobbies in anticipation... of receiving instant money. Better known as a Refund Anticipation Loan (RAL), this product affords taxpayers the capability of receiving their anticipated tax refund within 24 72 hours of IRS acceptance of their return. The cost associated with this type of funding is sizeable; however, this has not proven to be a deterrent. Many taxpayers have received their tax refunds in this manner for a number of years, with some growing to rely on this process. The horror stories of RALs gone awry are equally awe-inspiring; but let us focus on those who were approved year after year without fail.
Unfortunately, or fortunately depending on which side of the tax return your bread is buttered on, the Office of the Comptroller of the Currency (OCC) has instructed HSBC to terminate its contract with H&R Block as the financier of these loans. Effectively, THE TOP DOG HAS BEEN BLOCKED and no longer has instant money capabilities. This action ironically follows the Internal Revenues announcement this past August that they will no longer disclose whether or not a taxpayer has a debt indicator. These indicators were as good as gold, whereby RAL pushers could make a determination on the probability of a taxpayer receiving his or her tax refund in full. If no debt indicator was present, the individual was deemed a suitable candidate for a RAL, should they ever apply. If you were delinquent on back taxes, child support, student loans, and a number of other obligations to which a tax refund can be offset, your debt indicator would be a red flag; rendering you ineligible.
Although we have not seen the last of the RAL, as Jackson Hewitt may continue to offer this product to its customers, the landscape of paid tax preparation has been significantly altered. The 2011 tax season is only hours away, and what it will bring remains to be seen. What is certain is that millions of taxpayers will have to find alternatives to this annual financial quick fix. Perhaps some good old-fashioned tax and financial planning might help those who have come to rely on these RALs, quite possibly to their own detriment. If you have grown to accept the forfeiture of a portion of your tax refund as commonplace, it should be noted that normal refund timeframes are a viable option. Those who file their tax returns electronically can typically expect to receive their entire tax refund in as little as two weeks, when utilizing the direct deposit option. Notwithstanding the cost of the tax preparation, this option is free, and there is nothing to anticipate.
{ 0 comments... read them below or add one }
Post a Comment