First Anticipation loan SC

[taxguykarl]

Background:

The major tax preparation chain where I work promotes loans against a client's tax refund. There are two available one in which the client leaves with a check and receives the rest of the loan within the next 72 hours. The other is where the full amount (less finance charges and our preparation fee, needless to say).

This is of course a loan, which must be repaid; moreover, the decision to grant (or not grant) the loan is by an outside bank. Approval means there is money to the borrower within the next 72 hours.

If the loan is declined, their interest is refunded and they get their money in a week or two--an inconvenience?! I think not--Mrs. TGK and I can wait for our money without enriching some banks.

Simple enough right? Well every year we get at least one SC who can't get that into their heads. This one takes the cake.

I took Ms. SC's call. She asked about her check. I replied that her overnight loan was declined and the fun began. She demanded a supervisor (not available this was Sunday); next she haranged me about how unfair this situation was. Understand that the IRS had already accepted her return so there was no cancelling. This piece of work also claimed that the preparer guaranteed that SC would get the loan (not hard to believe as CW is a first-timer) as did the SM (I find that hard to believe as she knows better than to say that).

SC ranted about the process being dishonest and how unfair it was. I heard another woman egging her on in the background. Saying something to the effect about having the right to take your business elsewhere.

She called 4 times--after the second time the call got cut off (WINK-WINK-NUDGE-NUDGE), each time she was increasingly nonsensical and abusive. I finally stopped taking her calls (isn't Caller ID wonderful?), besides there were non-sucky people waiting to do their taxes.

After I closed the store, I wrote an email for the SM and Territory Manager. I just checked; they both recieved the message. I wonder if they'll fare any better.

[Aethian]

I understand why some people use tax preparers. I deliver mail to a lot of tax perparers that also run monthly/weekly budgets for people with businesses or just have money that needs constant watching. Other then that I don't understand the ones that pop up overnight in January. (Not saying you work at one, just saying I don't understand the concept.)

So I really don't understand the loans ontop of the refund that may or may not come. When you guys prepare the taxes is there anything that comes up saying that they will definitely get something back? I know I've talked to people before that thought they were going to get back in the thousands and got nothing because someone garnisheed them. And then what happens to that loan?

Just curious mind you...

[Camry178]

The customer has to repay the loan.

The RAL (refund anticipation loan) is a check the customer gets. The RAL may be for the full amount or a partial amount of the refund that they are expected to get from the IRS.

The RAL is for people that just can't wait the 10 or so days that it takes to get your money direct deposited into your account from the IRS because they want it NOW, NOW, NOW.

Now if all goes well, the IRS check goes directly to the bank to pay off the loan. If something goes wrong, the customer has to repay the loan plus whatever interest.

I did a very brief stint with them. I took their tax class which was awesome and they offered me a job. I figured it be a good part-time gig. Once I went through orientation and all the other videos they make you watch, I couldn't do it. I thought some of the things they wanted us to push on the customers were a waste of money. But that's just my opinion. The tax class was awesome.

Man, I rambled a bit. But I hope that helps explain it a bit.

[taxguykarl]

To answer your queries, Aethian:

When you guys prepare the taxes is there anything that comes up saying that they will definitely get something back?

The amount of their refund is based entirely on the information that the client gives us. If their info was bogus (every other day we get a brodcast e-mail from the franchise ower about a fradulent W2 passer) or if they didn't bring, for example, a 1099 that shows a significant income without any withheld tax; that matter will not come up 'til after the return is transmitted.

In the later case (not bringing all their income info), the omission may not even come to anyone's attention before October. Among the standard questions we ask is about the kinds of debts that would be garnished from a tax refund. If the client was not honest with their answers to those queries, that individual can (and does) see their refund intercepted to pay those debts. I have seen a lot of tax and child support debts paid in this manner.

I know I've talked to people before that thought they were going to get back in the thousands and got nothing because someone garnisheed them. And then what happens to that loan?

They are on the hook for that loan amount. The interest is withheld, so they have to pay the principle. The banks that offer this kind of loan can be counted on one hand. The next time they file that refund may be garnished to pay that old loan (barring bankruptcy, of course).

I hope that answers your queries. Remember the stupidest questions are the ones not raised in a timely manner.

[Catwoman2965]

Camry178, my dad did the same thing when he first retired. Decided he wanted to do seasonal tax prep, took the classes, and went to work for one of the larger tax prep companies, and I'm guessing it may be the same one as you worked for. He really enjoyed the actual work, and the clients, but HATED, HATED, HATED pushing those RAL loans and other products on customers.

HE finally got fed up, and volunteered with AARP during tax time, which he really enjoyed too.

[taxguykarl]

He really enjoyed the actual work, and the clients, but HATED, HATED, HATED pushing those RAL loans and other products on customers.

I don't push those either, but so many insist. I try to push the other bank products that withhold our fee--especially the ones with direct deposit. I'll be the first one to admit that the anticipation loans are a ripoff.

[Aethian]

Yes both of you answered those two big questions I had. I like TurboTax it gets my taxes done quickly and if I end up owing I can wait a bit on filing so that I can pay that right off the bat. But if I did have quite a bit of tax prep to go through I would go to a professional tax preparere just to know that everything is going to go in right.

[taxguykarl]

Yes both of you answered those two big questions I had. I like TurboTax it gets my taxes done quickly and if I end up owing I can wait a bit on filing so that I can pay that right off the bat. But if I did have quite a bit of tax prep to go through I would go to a professional tax preparere just to know that everything is going to go in right.

Glad to clear that up. As a matter of fact, if you owe you can submit the return any time before April 15th. You just have to make the payment or submit an installment plan by 4/15.

[Aethian]

I just like sending in the payment and the return at the same time. Most times it's just waiting till paycheck time to be able to send it out. I've been good the past few years, neither paying or recieving more then 30 to either state or federal.

[Broomjockey]

I'm going to have to go to a tax preparer this year. Every year before, I've just been able to glom on to my parents' taxes, and have their accountant do it. Apparently that's a no-go now, due to my age or something. So since this is the first year I'll be doing it myself, I wanna go and pick the brains of a professional as to what kind of things I can be deducting in my situation. I figure after this year, my taxes are simple enough that I'll be able to do them myself, once I know what to hang on to.

[taxguykarl]

So since this is the first year I'll be doing it myself, I wanna go and pick the brains of a professional as to what kind of things I can be deducting in my situation. I figure after this year, my taxes are simple enough that I'll be able to do them myself, once I know what to hang on to.

I noticed that your are located in Canada. Well the Revenue Agency has an excellent tutorial on preparing your return.
I did a Canadian federal and Ontario provincial return for a client last year. Convientially the T4 tells you what figure goes on what line of which form. Truth be told, I actually found Ohio forms more complicated than Canadian froms.

Good luck.

[protege]

*still finds it amusing that the Pennsylvania forms...are longer than the *Federal* ones*

We are, after all, the land of red tape. Hell, we invented it
Seriously though, I've always done my own taxes via TurboTax. Nothing really hard about it--just fill in the blanks. Granted, I'm an accountant, but still. What usually happens, is I'll get a nice refund from the Feds, but have to pay state and local.

[Aethian]

Which version of turbo tax do you like?

[tamezin]

I don't push those either, but so many insist. I try to push the other bank products that withhold our fee--especially the ones with direct deposit. I'll be the first one to admit that the anticipation loans are a ripoff.

If I have all of my paperwork early enough, I can use a free online service, still file electronically, and get my refund back faster than most tax prep places can get for me (barring RAL, which I would never do). I tried to get my mom to try it, she refused, she would rather pay out the backside, to file a 1040a. She doesn't have huge exemptions or deductions, the only reason she needs the 1040a is the retirment fund her company uses otherwise she could do the 1040ez. She pays out 80-90 bucks every year to have her taxes done it is insane.

[AriRashkae]

Which version of turbo tax do you like?

Don't know about Protege, but we get the TurboTax Premier every year, and love it. I think it's the only thing that keeps my mother somewhat sane when she tries to do the farm taxes. Of course, the cat likes to help by finding the exact center of the papers on the floor for sorting, and sprawling on as many as possible.