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July 25, 2008 4:50:02 PM CDT

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IRS May Block Popular Instant Refunds

Posted Jan 4, 08 10:57 AM CST in Business 

(Newser) – The IRS may stop big tax-preparation firms from offering instant refund loans to curb potential fraud, Bloomberg reports. Such loans are popular with taxpayers who don't want to wait weeks for a check, but interest is often steep and consumer groups have been pushing for a crackdown. The proposed change would not affect this year's taxes.

Lawmakers hailed the steps to protect consumers from rip-offs. Companies such as H&R Block and Jackson Hewitt, who would be hit hard if the change comes into effect, were not as pleased. One firm said any changes would be "bad for the consumer. "Jackson Hewitt's stock had its biggest one-day fall ever following the news.

Source Bloomberg

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H&R Block Net has lost more than a billion dollars from its subprime mortage lending unit and moves to stop refund loans are likely to hit it hard. A company spokesman said there was no incentive for...   (Getty Images)
Intuit software TurboTax, Quicken and QuickBooks on sale at Micro Center computer store in Santa Clara, Calif., in this Monday, Feb. 13, 2006 file photo. T (AP Photo/Paul Sakuma, file)   (Associated Press)
Tax returns being processed at an IRS facility. The IRS is looking into changing regulations to clamp down on 'refund loans', concerned that the practice encourages fraud.   (Getty Images)
The Internal Revenue Service is updating its regulations and is considering bringing in rules to restrict firms like H&R Block from using taxpayer information to offer so-called 'refund loands.   (Getty Images)
Tax season is nearly upon us.   (Getty Images)
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IRS  • income tax  • tax fraud  • Internal Revenue Service


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