We’ve been warning people for years to steer clear of the “refund anticipation loans” that get you your tax refund ASAP but at the cost of usurious interest rates and fees. And between growing consumer awareness that RALs are a bad deal and the bigger banks dropping out of the business, only one bank has been backing the loans — and that’s all about to end. [More]
Hundreds Of People's Tax Returns Found Dumped In Front Of Jackson Hewitt Office Because They Were "So Heavy"
A soggy pile of hundreds of old tax returns was found in front of an abandoned Jackson Hewitt tax prep office in San Francisco in late October. The papers had social security numbers, names, addresses, and phone numbers, a potential goldmine for any identity thief who got their hands on them. [More]
It probably goes without saying that I love a good cat fight, that’s why I’m licking my paws and purring with delight over the news that Jackson Hewitt has bared its claws to take on the biggest feline of them all, H&R Block. [More]
Tax Cat here! Calling it a “game changing event for the tax system”, the IRS announced in a press conference call, that they invited me, a tax cat, to that they’re launching 6 sweeping regulatory reforms to clean up the paid tax prep industry. The IRS is not naming names but I’m growling at you, H&R Block and Jackson Hewitt. Numero uno: [More]
As an educated consumer you may wonder why people would choose to use a Refund Anticipation Loan when they can e-file and receive their refund in only a few days.
Last week we wrote about I-Can! E-File, a free electronic filing service for your federal income taxes. It’s a great idea, and we’re thankful to the Legal Aid Society of Orange County for doing something like this—but you might want to find an alternative this year and give them some time to work out the kinks. Today a reader emailed us to point out that icanefile.org’s password system can be easily cracked, because instead of letting you choose an original password, it requires you to use your name and social security number to set up an account.
I-CAN! is a web-based tax preparation tool that will file your tax return completely free of charge. I-CAN has no eligibility criteria or income restrictions and will eFile your state return for free if you live in California, Michigan, New York, Pennsylvania or Montana. It almost sounds too good to be true. So why isn’t I-CAN! a member of the IRS’ Free File Alliance?
Refund anticipation loans are bad enough, but H&R Block and Jackson Hewitt want you to get a RAL, and then put it on a fee-riddled pre-paid debit card. What a great idea!
The IRS investigation into Jackson Hewitt’s malpractices has deepened, NYT reports:
The lawsuits filed against the Sohail-owned or controlled franchises said that employees had been pushed to crank out returns in exchange for bribes, to accept scant or false documents, like W-2 forms, and to falsify taxpayer data to receive the earned-income tax credit, a federal assistance program.
And that’s why we like accountants. Not only will a good one help you find deductions, they also know enough to not do stupid stuff. It’s you, not the tax form preparer, on the hook if you file a fraudulent return. — BEN POPKEN
We haven’t been getting many complaints about tax places this year but as far as we know, they still suck. They’re known for messing some people’s returns up pretty bad, or encouraging people to take questionable deductions. Like making up a child, for instance. Here’s a walk down memory lane, a lane that’s definitely shady…
The US Government has filed “civil injunction suits against five corporations that operate Jackson Hewitt tax preparation franchises, as well as 24 individuals who manage or work at the franchises.” The suits allege that employees at 5 Jackson Hewitt franchisees committed pervasive fraud.
The number of refund anticipation loans declined 22.5% last year as consumers took advantage of cheaper and only slightly slower alternatives, NYT reports.
- Some of America’s most cash-strapped taxpayers – those from low- and moderate-income families – spent nearly $1 billion in the latest year recorded for what is almost always an unnecessary product: the so-called “refund anticipation loan” at income tax time. With another tax season gearing up, consumer advocates at the National Consumer Law Center (NCLC) and Consumer Federation of America (CFA) are warning taxpayers to steer clear of refund anticipation loans (RALs), one of the most avoidable tax-time expenses. New figures reveal that RALs drained about $960 million in loan fees, plus over $100 million in other fees, from the wallets of nearly 9.6 million American taxpayers in 2005. “Taxpayers can save themselves over a billion dollars by just saying ‘no’ to quick tax refund loans,” says NCLC staff attorney Chi Chi Wu. “These loans take a chunk out of your hard earned tax refund, and they expose you to the risk of unmanageable debt if your refund doesn’t arrive as expected.”
TRA’s are bad! Just say no.—MEGHANN MARCO
If you haven’t done your taxes, don’t go to H&R Block or Jackson Hewitt. That’s the advice we receive from Peter, a professional accountant. He says they will rip you off. And if they mess up, they’re not liable.
NBC sent an undercover intern to different tax preparers. It looks like the big names in tax prep may charge higher fees, but that’s more than made up for by their ability to help you commit tax fraud.