newjerseynewsroom.com

BY BOB HOLT

NEWJERSEYNEWSROOM.COM

Always out for your best interests, the Internal Revenue Service is trying to protect taxpayers from high fees associated with loans on their refunds.

In the past, the IRS would give banks information on whether a tax refund check would be held up for any reason, such as back taxes, child support or student loan payments.

Using that information, banks would set up loans for the taxpayers. The change now is the IRS is no longer giving banks that information and now fewer banks are willing to give out loans on income tax refunds.

The IRS says they are trying to protect taxpayers from the high fees that go with with a refund anticipation loan. The problem is no matter the cost, some people want that option.

Personalfinancebulletin.com reports that the IRS recently blocked tax preparation firm H&R Block from offering refund anticipation loans to its customers. In the past up to 40% of its customers had used the service to get money that the IRS owed them without having to wait for the refund check.

According to wowt.com, some tax preparers will give refund anticipation loans this year, but the amount is limited to $1,500. Depending on how things go this year, those refund anticipation loans could be cut out altogether in the near future. The IRS says the loans are too expensive and refunds are coming back to the taxpayer faster.

But according to the News-Herald, some people have been having an easier time receiving refunds. Those people would be convicted criminals.

Prisoners nationwide have bilked taxpayers out of $123 million in the last five years through phony tax refunds they applied for from their cells, according to four senators.

The IRS says congressional action is needed to require prisons to report their tax status to the Bureau of Prisons.

Good luck with that. Make up your own joke about half of them being in prison already.

Prisoners either file false returns in their names or file fraudulent tax returns with phony names and Social Security numbers often using accomplices outside prison to receive and cash refund checks. IRS spokeswoman Christina A. D'Amico said prisons aren't required to provide all the needed tax information on prisoners.

According to the IRS, fraudulent tax returns filed by prisoners in the U.S. rose to almost 45,000 in 2009, up from 18,000 in 2004.

But the IRS hopes that more than 70% of returns will be filed electronically this year and say tax payers can expect to get refunds in 7 to 10 days after filing.

The IRS lets you check on the status of your refund here.