Condor wrote:
- quote -

Oh, ok. I saw that POST, but I Thought you were answering the other fellow
who asked where I read it; I didn't realize it also contained germane info
to my original request. Now, this makes sense when reading. Thanks!

--
----------------------------- Regards -

- Andrew

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Jan 13, 1:13 pm, "Condor" <Con...[at]loosecannon.net> wrote:
- quote -

IRS does regulate tax preparers. In fact they have a couple RAL
regulations to0. Within their jurisdiction to prohibit RALs from being
offered in a tax preparation location. However, the IRS (actually the
Taxpayer Advocate) tried to influence IRS policy making by actually
including the RAL language in the final IRS 7216 regs. Cooler heads
prevailed within the IRS and argued that IRS does not make policy
decisions based upon anecdotal infernece. Hence, the ANPRM - long way
to go before a reg will be issued (if at all). The real issue remains
that the Taxpayer Advocate and certain consumer groups (CFA/NCLC) are
on a witch hunt to rid the loans totally. It seems to me to be very
reckless government when an appointed high level official continually
tries to influence not only the IRS to act, but Cogress as well... all
without evidence nor even asking the whales in this case if they want
to be saved. The real indictment here is not on the RAL industry. They
provide a fairly priced product (most cases the lowest cost option
available to the people who use them - we can debate that later) to
people who need their money quicker than the IRS is able to deliver
it. In fact, RALS enjoy a 70% repeat factor and an 85% satisfaction
rate. Not many products can boast that. The TPA will tell you though
that they really don't know what they are saying or doing and need to
be guided. I think the TPA needs to be guided on this one. Why doesn't
she tell congress not to take lower income American's money to start
with? Thats the real shame....

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

- quote -

As I said above, IRS published an ANPRM in the Federal Register on Monday,
January 7. If you want to read it, open the link below and scroll down the
alphabetic list of agencies to Internal Revenue Service. See the entry
listed as: "PROPOSED RULES
— Guidance Necessary to Facilitate Electronic Tax Administration Updating
of Section 7216 Regulations."

http://www.access.gpo.gov/su_docs/fedreg/a080107c.html

Internal Revenue Code § 7216 governs tax professionals' obligation to keep
their clients' tax information confidential. Currently, the regulations
allow a tax pro to disclose client information for purposes of a RAL with
the client's voluntary consent. The notice in the Federal Register is
inviting comments on whether IRS should rescind the taxpayer's option of
consenting to disclosure of his or her tax information to a RAL provider.
If IRS were to adopt such a change, it may end up being a de facto bar to
offering RALs, however the RAL providers probably would find for other ways
to hawk their products without running afoul of the regulations.


Condor

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Condor wrote:
- quote -

Thanks all for the posts and insight, but I don't think anyone has addressed
my original point of legality and jusridiction questions.

The point is "The Internal Revenue Service said Thursday that it was
considering curbing tax refund loans offered by tax preparers such as H&R
Block Inc. and Jackson Hewitt Tax Service Inc. "

That's what I was asking about. Regardless of whether or not it's "Fees"
or "interest rate", or whether or not there some computer-gook about
verification of the return (so, what if they stopped doing this; that's not
the point). , etc. etc. etc., no post I've ready deals with the legality and
jurisdiction issue. Of course, I realize that this is a *tax* forum, not a
*legal* forum, but I am still unsure how they can do this.

Oh well, hopefully I'll never have to enter into this type of agreement.

--
----------------------------- Regards -

- Andrew

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

the RAL industry has survived several tax seasons without the debt
indicator when it was eliminated during the mid 1990's. If it is
eliminated again, then the banks will probably just tighten the
criteria for approving them. without being preachy (don't think this
is the place for it) i just want to say that if more practitioners
were upfront about the total cost of this product, then there would
not be such an outcry for its elimination.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

In article <2o2dndIv7bdhaxvanZ2dnUVZ_jCdnZ2d[at]comcast.com> ,
Condor <Condor[at]loosecannon.net> wrote:
- quote -


There are many opinions out there that the lenders would not give up
such a lucrative business. Without the Debt Offset Indicator they
would just charge each taxpayer more for the loan.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

- quote -

IRS published an Advance Notice of Proposed Rule Making (ANPRM) regarding
this issue in the Federal Register on Monday, January 7.


Condor

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

- quote -

You're correct that IRS cannot bar anyone from offering a loan in
anticipation that the lender will be repaid from the taxpayer's refund.
However, lender's don't like making these types of loans without almost
iron-clad assurance that they can expect IRS to direct deposit the refund
into the lender-controlled RAL bank account. That's how the lender counts
on being repaid.

Currently, lenders receive this assurance from IRS about 24 hours after the
taxpayer's return is electronically transmitted. IRS sends the transmitter
an acknowledgement file with a boolean, i.e., true/false, indicator
confirming whether the direct deposit designation on the tax return will be
honored. If the taxpayer owes back federal tax or non-tax debts to which
IRS is required by law to offset the refund, IRS, without technically
disclosing the existence of the taxpayer's debt to the transmitter, sends a
negative direct deposit indicator back with the acknowledgement file. When
the transmitter/preparer gets the negative direct deposit indicator, the RAL
is denied because they know the refund they would be counting on to repay
the loan very likely won't come through.

IRS is being pressured by anti-RAL interest groups to discontinue
transmitting the direct deposit indicator, be it positive or negative, back
with the acknowledgement file. If IRS were to do this, preparers most
likely would discontinue offering RALs since they would be too risky.


Condor

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"Andrew" <andrew[at]losset.net> wrote
- quote -


Just to be clear here. The tax preparation firm isn't ~making~ the loan.
Nor does the lender prepare tax returns. Let's just take H&R, who prepares
the return, and as a separate "service" offers to fill in the paperwork (all
on computer now-a-days) for the loan application, which they forward to the
lender for approval. Two different companies entirely.

FYI: It's not at some high rate of interest, till you factor in the loan
application fees charged ~by~ the tax preparer. Remember that it ~is~ an
unsecured loan, so it'll carry a higher than prime rate. The deal is that
with direct deposit, the refund is in the bank in 9 to 15 days - so that is
how long the loan is for in reality. The fees, from what I've seen, are
bracketed by loan amount, so they aren't set by, or charged like regular
interest rate loans.






- quote -



Can they stop you from making a loan? No.

Can they stop telling the lender "the refund is good"? Clearly they can.
And the returns flagged for RAL should be sent paper checks - in 10 weeks or
longer.

If you were uncertain that your borrower had the ability to repay the debt,
you probably wouldn't make the advance.




- quote -




They wouldn't deny the ability of the tax preparer to make loans, they would
take away the ability for the lender to verify the refund status as being
"good". Often times tax offsets eat up the proposed refund.



- quote -

It's taxpayer data, and they don't have to release it as quickly as they do.





--
Paul A. Thomas, CPA
Athens, Georgia

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Bill Brown wrote:
- quote -

http://www.latimes.com/business/la-f...1,340237.story
http://www.baltimoresun.com/business...,969542.column
http://www.msnbc.msn.com/id/22502057/
http://www.npr.org/templates/story/s...oryId=17952912

Pick one. It's been all over the news these past few days.
The last one links to an NPR audio story.
JOE

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Jan 10, 9:46*pm, "Andrew" <and...[at]losset.net> wrote:
- quote -

Read where?

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

So read this past week that the IRS is thinking of putting the kibosh on
those companies that offer 'anticipation' loans after doing your tax
returns, of course for a huge annualized interest rate.

What I wonder, and would like any insight is, how can the IRS do this
legally? Can they unilaterally control a firm from offering? What is their
jurisdiction in such a case? If it was the FTC, maybe so, but I just don't
get it.

Strictly my mind wondering....

--
----------------------------- Regards -

- Andrew

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >