Predatory Lending and Tax Refunds

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NPR Online 
August 17, 2010
McBride, Sarah

The Internal Revenue Service has decided to end its practice of sending "debt indicators" to tax preparers as a way of informing them of any portion of a taxpayer's refund that would be docked as a result of student loans, child support, or other obligations. Tax preparers are up in arms about the decision, saying it will make it much more difficult for them to determine whether or not they should grant a refund anticipation loan to a taxpayer. Supporters of the IRS' decision, however, say it will stop tax preparers from charging exorbitant fees for relatively short-term loans and will also ensure that programs set up to help the poor do not get diverted to pay the fees. Critics counter that the move hurts the poor, who are often in need of their tax return right away or do not have bank accounts to use for direct deposit.
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