IRS May Block Popular Instant Refunds

Proposed change aims to curb fraud, steep loan rates
By Rob Quinn,  Newser Staff
Posted Jan 4, 2008 10:57 AM CST
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)
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(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.