Predatory lending in the tax world
Date: Thu, 01/03/2008 - 04:29
I have been trying to decide if I really want to take the tax preparer job, my bank book says I should but my gut says I shouldn’t. It is not in the greatest part of town and the owners have never been really clear about their security plans. I can just see some stupid person coming in thinking we have cash because they somehow associate tax refund with actual cash transactions. Also this type of instant tax refund is a predatory lending practice under a veil. They offer interest loans on anticipated tax refunds for people who are desperate for money. I just in good conscious cannot rip people off no matter if they know or not. It is just one human being taking advantage of another.
What do you all think of these types of loans and do you think I should stick with my gut or what my bank book says?
Always stick with your gut feelings. It is better never to know
Always stick with your gut feelings. It is better never to know if you were wrong than to know well that you were!
These tax loans are horrible and I am very glad I have a lady a
These tax loans are horrible and I am very glad I have a lady at home who is good at numbers. I use H&R Block's software to do it ourself at home.
RAL's are a BAD idea. Especially the one H&R Block(head) was
RAL's are a BAD idea. Especially the one H&R
Block(head) was promoting last year - "just bring your last paystub of the year to us, and we'll do a tax refund loan based on that". Riiiiight. How many of you have ever LOOKED at your year-end paystub and compared it to your actual W-2? The amounts can be drastically different. From personal experience, the difference can mean more of a refund. But what if it ended up being less of a refund? Then you're on the hook for the difference to H&R Block(head).
I've never used one of those RAL's using a year-end paystub, and would never advise anyone to. They're simply a thinly-veiled PDL.
Sorry - To further explain this thread was moved to another foru
Sorry - To further explain this thread was moved to another forum, and the OP was looking for it. Hence - It's back.
Huh? Anyway, i agree. Trust your gut. I know that it probably sa
Huh? Anyway, i agree. Trust your gut. I know that it probably says in little letters on the back of the check that if you sign this and cash it, or deposit it in your bank, you agree to all the terms of the loan. People don't read that, and if they did, they probably wouldn't sign it. Trust your gut and don't do it if you feel morally and ethically uncomfortable.
Go with your gut feelings on this! You can always find another s
Go with your gut feelings on this! You can always find another second job, but this doesn't sound like a good thing at all.
On top of that, refund anticipation loans really are the biggest scam since the invention of the PDL. The interest rates amount to vigorish, and the fees are ridiculous. To top it off, the RAL companies prey on predominantly lower-income folks who are usually desperate for the cash. Yes, I'm talking about H&R Block, here.
well, if it is any consolation, it sounds like the IRS is gonna
well, if it is any consolation, it sounds like the IRS is gonna shut downthose Refund Anticipation Loans, they violate a confidentiality section of the IRS code. That ethical question asside, your safety is the most important consideration. Do they have an office in a safer part of town? does a competitor (h&r block, Jackson Hewiitt, etc ) have an office thats is in a safer part of town? Chances are they are all hiring right now.
Quote:
The Internal Revenue Service is seeking input on whether it should consider banning tax return preparers from offering refund anticipation loans. The IRS did not enact restrictions on the loans but said it will accept public comments on the issue until April 7. "The Treasury Department and the IRS are concerned that RALs and certain other products may provide tax preparers with a financial incentive to take improper tax return positions in order to inappropriately inflate refund claims," the IRS and Treasury Department said in a guidance statement. David Williams, IRS director of electronic tax administration and refundable credits, said in an interview that the IRS wants to know whether it should propose new tax regulations prohibiting tax preparers from sending client information to banks that provide the loans. He said this wouldn't prevent clients from taking their information directly to a bank or other entity that could grant a refund anticipation loan. If enacted, the restriction on RALs could have a significant effect on the bottom line of tax preparers such as Kansas City-based H&R Block Inc. (NYSE: HRB). According to a filing with the Securities & Exchange Commission, Block recorded $193.5 million in revenue related to its refund anticipation loan program for its fiscal year that ended April 30. Block issued a statement Thursday saying it looks forward to working with the IRS on continuing to develop best practices for refund anticipation loans. The company said RALs are already regulated by 10 federal laws and IRS rules. Richard Koskey, principal emeritus at Pattison Koskey Howe & Bucci CPAs P.C. in Hudson, doesn't like the idea of tax preparers providing refund anticipation loans. Here is a similar article to the one I was reading. This one was at bizjournals.com, but if you go to Google news and search "refund Anticipation Loans" there are several stories about this topic there. "We do not that," he said. "It's almost, to me, unethical and we've never done that and I think it's inappropriate for tax preparers to do that." Pattison Koskey Howe & Bucci were the No. 1 ranked tax preparer in The Business Review last year. The company processed 5,967 tax returns in 2006. Koskey said the practice is unethical because "there's a tendency to increase the funds illegally by some deductions that may or may not be taken. It makes tax preparers more aggressive." |
The above quoted from bizjournals.com/albany/stories/2007/12/31/daily32.html
H & R Block
Believe it or not H & R Block is right next door to these yahoos. Anyhow I am sticking with my full time job and God will provide a second income when the time is needed, he always provides for me. Thanks for "finding" my thread, I had no clue where it ran off to. I think it is kind of ironic that these news articles about the IRS clamping down on R.A.L came about the time my gut was in a knot, the news articles are just the icing on the cake I needed to make my final decision... HOWIE NO DEAL!
probably off subject of real topic here.. anyways my sister-i
probably off subject of real topic here..
anyways my sister-in-law has very successful business involving tax returns,payroll, etc..
she actually has to send her prospective employees to a course from H R Block
not sure about specifics only found it strange that this company was providing required training for employees of individual companies..(of course HR tries to hire them)
tax preparers are getting extremely aggressive these days another industry where greed is paramount
Training
This company Instatax hired people through ads on Craigslist at $8hr. The "big whigs" came in and trained the owners in one day how to use their software. I went in for 4 hours one day to train and ended up "training" others including the owners how to use the software. They did not know what schedules to use for things like medical expenses deductions, mortgage interest etc... I only knew this stuff from preparing my own taxes for years. Anyhow that day was the beginnning of my gut feeling about this company. Would I want someone who walked in off the street for $8 hr to prepare my taxes???
Boy, that's a scary thought. I think you're better off making t
Boy, that's a scary thought. I think you're better off making the decision that you did - stay away from those companies.
I've done my own taxes for years - first by hand, then purchasing the standalone software from Turbotax, and then on the web using Turbotax's website. I've never been audited, questioned, or otherwise troubled by the IRS regarding my returns. I've even had to amend them once or twice when I found an error that I made (Turbotax is great, but it won't stop you from entering the wrong dollar amount from a W-2...duhhhh did I feel dumb!), and I've still never had a problem.
good 4 you sue bee and your statements regarding turbo tax!! g
good 4 you sue bee and your statements regarding turbo tax!! glad you support them and can back up intances that happened
Doing taxes
I like you Sue did my taxes by hand for many years and then when the computer age came about started using tax software, I use Turbotax now also. Most people do not know that you can go online and efile for free through the IRS website.
This comes from the IRS website "If you earned $54,000 or less in 2007, you can use Free File to prepare your taxes online beginning in mid-January 2008 right here at the IRS website"
Yes, that's true - you can do "free file" through the IRS websit
Yes, that's true - you can do "free file" through the IRS website, but it also depends on whether you have certain deductions to claim - there are limits to the free file. I've tried it twice and can't do it that way - can't remember why, but I've just gone back to using Turbotax.
And if you do efile and are due a refund, you should have the mo
And if you do efile and are due a refund, you should have the money in your account within two weeks, so it's really not bad.
What is the interest rate that's being charged on these loans and is it similar to a PDL? Like 300 percent?
[quote=SUEBEEHONEY70]Yes, that's true - you can do "free file" t
[quote=SUEBEEHONEY70]Yes, that's true - you can do "free file" through the IRS website, but it also depends on whether you have certain deductions to claim - there are limits to the free file. I've tried it twice and can't do it that way - can't remember why, but I've just gone back to using Turbotax.[/quote]
IRS has a FreeFile program, and there are also others available through the Free File Alliance. Qualifications vary quite a bit, so it may be worthwhile to look around.
On 'certain deductions', etc..... Most places, being able to claim the EIC will qualify you for a free return. So will being active-duty military.
From the 4 hours I spent "training" with these people this is wh
From the 4 hours I spent "training" with these people this is what I learned about how we woould operate the business
Our tax preparation fee is $149
Our loan fees of ranged from $75 to $300.
Our additional administrative or application fees could range from $25 ot $100.
If they wanted their check cashed immediately at the bank across the street we were instructed to steer the clients in the direction of that bank branch and their check cashing fee is $33
I was also supposed to go back for more training in how to sell more products and how to charge for extra W-2's and different Schedules.
So the more I think about it I think my decision was a wise one. At least these people only come around once a year whereas check cashing business's are 365 days a year. One more thing when the girl called me to set up my initial interview she stated something to the fact that the owners wanted to set up a check cashing business, THATshould have been my alert to hang the phone up and not pass go.
My dad taught me how to file my own taxes when I was 12 (my dad
My dad taught me how to file my own taxes when I was 12 (my dad owns his own company and he paid me anytime I went to work with him). I have been filing my own taxes every year since. To me it doesn't seem difficult at all. You can file online, and get your refund electronically within two weeks.
I think RAL's are a worse scam than PDLs. I don't understand why anyone would want to pay $3-400 in interest on a RAL just to get their refund 14 days earlier??? Are we that impatient ... we can't wait 14 days?
[quote=Stuck in the gut]From the 4 hours I spent "training" with
[quote=Stuck in the gut]From the 4 hours I spent "training" with these people this is what I learned about how we woould operate the business
Our tax preparation fee is $149
Our loan fees of ranged from $75 to $300.
Our additional administrative or application fees could range from $25 ot $100.
If they wanted their check cashed immediately at the bank across the street we were instructed to steer the clients in the direction of that bank branch and their check cashing fee is $33[/quote]
And here y'all thought payday loan outfits were warm and snuggly..... 
I realize many here fall into this category from the above post
I realize many here fall into this category
from the above post....
"This comes from the IRS website "If you earned $54,000 or less in 2007, you can use Free File to prepare your taxes online beginning in mid-January 2008 right here at the IRS website" "..
however when the average price for a home in our country is $219,000... even after the horrors of the current real estate slump...
this amount for combined husband and wife income is quite low for many people.. and why people over this total still seek the professional companies .
not defending anyone because there are so many bad companies out there ...I called several tax companies in my city today before I posted this response to see actual charges.. and the amounts "stuck in the gut" provided were way overboard..from what is happening in my town..
just like any industry I think "stuck" associated with a terrible company and is lucky not to be working for these what I would consider professional "rapists"!
[quote=socksfullofrocks]...these what I would consider professio
[quote=socksfullofrocks]...these what I would consider professional "rapists"![/quote]
I think that's a valid analogy.
I agree that this company I associated with for about 4 hours is
I agree that this company I associated with for about 4 hours is probably an exception to the rule. I think this company Instant Tax Service has swarmed into my state this tax season. I had never heard of them until this year and now I see their commericial at least twice a day. My states average home price is $93K and our average income is $36K. we are prime targets for these predatory tax "agents". I worked for a CPA last tax season and their fee started at $150 for average returns and went up depending on how complicated they were but that was it, just a flat fee and some of the returns I processed were COMPLICATED! Anyhow back in 2004 I went to Jackson Hewitt to have my return done with 4 w-2's and they tried to charge me $300. I laughed at them and decided to do my own taxes like I always have. So there are good and bad eggs everywhere.
Stuck you've made the right decision! Good for you!Like you Sue.
Stuck you've made the right decision! Good for you!Like you Sue...I have been doing my own taxes for years. I was confused the year my husband passed-away and went to H&R Block. While preparing my tax return the preparer informed me I could not include my daughter as a dependent even though I supported her over half the year and she was not claiming herself. I knew that was wrong...I went home got my IRS books and did it myself. Ever since then I do my own with Turbo-tax and have had no problems.
I like the tax programs that are offered online or for purchase.
I like the tax programs that are offered online or for purchase. They walk you through each step and let you know if something is amiss. I think the IRS is going to put a stop to the high interest R.A.L's and should have them completely done away with by next tax season. It seems they just started about the time payday loans/check cashing did, anyhone have ideas about when these tax refund loans started?
This is not a company I would work for if you had to show your b
This is not a company I would work for if you had to show your bosses the software. Sounds like some scam or at best a joke.
