IRS RAL Comment press release

For Immediate Release Contact: April 8, 2008 Chi Chi Wu, NCLC, 617-542-8010 Jean Ann Fox, CFA, 928-772-0674 Robin Robinowitz, Philadelphia Campaign for Working Families/CLS, 267-973-1064 Peter Skillern, CRA-NC, 919-667-1557, x 22 Tax Preparers Confuse and Abuse Mystery Shoppers in Durham and Philadelphia Consumer Advocates Urge IRS to Stop Tax Preparers from Using Confidential Tax Returns to Sell Refund Anticipation Loans and Other Products The 70 million taxpayers who pay commercial firms to prepare tax returns are at risk of confusion, abuse, and errors by tax preparers selling costly refund anticipation loans (RALs), according to a new report and comments filed with the Internal Revenue Service. This week, advocacy groups released a report on mystery shopper testing, entitled “Tax Preparers Take a Bite out of Refunds: Mystery Shopper Test Exposes Refund Anticipation Loan Abuses in Durham and Philadelphia.” The report was also sent to the Internal Revenue Service as part of consumer comments filed in the IRS rulemaking on use of tax returns to market RALs. The mystery shopper tests portray an industry that imposes high costs on vulnerable low-income filers and fails to provide high quality tax preparation. Preparers in Philadelphia and Durham, NC, failed to tell taxpayers about free filing options, and some failed to disclose that RALs are loans. Preparers made serious errors on some testers’ ...