| 13b. In 2005,
US taxpayers spent an unnecessary ________ to receive their tax
refund faster through Refund Anticipation Loans. Incorrect
In 2005, US
taxpayers spent an unnecessary $960 million (a 22% decrease from
2004 to 2005) to receive their tax refund faster through Refund
Anticipation Loans.
Quick tax
loans, or refund anticipation loans (RALs) are offered to
taxpayers who are in a hurry to get a tax refund. After going to
a paid tax preparer to get a tax return filled out and filed
electronically, taxpayers can borrow the value of the
anticipated refund immediately. When the refund check comes back
from the Internal Revenue Service (IRS), it is reduced by the
amount of the refund anticipation loan. Taxpayers using RALs
obtain their money faster by only two weeks or less (the amount
of time they would have to wait if they used electronic filing
and direct deposit).
Source: National Consumer Law Center/Consumer Federation of
America,
http://www.consumerfed.org/pdfs/RAL_Report_2007020507.pdf.
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