Refund Anticipation Loan Quiz
Quick tax loans or refund anticipation loans (RALs) target taxpayers who are in a hurry to get a tax refund. After going to a paid preparer to get a tax return filled out and filed electronically, taxpayers can borrow up to the amount 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 get their money within a week to 10 days if they use electronic filing and direct deposit.
1. How many refund anticipation loans did U.S. consumers take out in 2007?
2. Consumers paid about $1.25 million in refund anticipation loan fees in 2007.
3. How much money was estimated to be spent by the working poor to get access to the Earned Income Tax Credit through refund anticipation loans?
4. Over half of refund anticipation loan borrowers in the U.S. were Earned Income Tax Credit recipients in 2007.
5. According to the Consumer Federation of America, what were the annual percentage rates that refund anticipation loans carried in 2008?
6. If the tax refund from the IRS is for less than the refund anticipation loan, the taxpayer does not have to pay the difference back to the loan company.
7. What percentage of refund anticipation loan recipients had incomes of $35,000 or less?
8. Most recipients of refund anticipation loans do not realize they are receiving a loan.