Robert Bliss, Director of Communication, Department of Revenue
In what is widely viewed as a blow against refund anticipation loans, the Internal Revenue Service announced earlier this month it would end in the coming tax season its policy of releasing information about back taxes and other debts owed by taxpayers.
In its story on the move, the Associated Press wrote that:
"The information, called debt indicators, has been included on acknowledgments the IRS sends tax preparers when it receives returns filed electronically …The indicators served as warning that some or all of a person's refund might be held to cover old debt, including back taxes, unpaid child support or delinquent federal student loans."
Banks that fund refund anticipation loans use debt indicators to decide whether a taxpayer expecting a refund is a good risk for such a loan. The loans themselves have been criticized for years for charging high interest rates and fees in exchange for providing cash that may arrive only days ahead the federal tax refund check.
The National Consumer Law Center estimates that in tax year 2008, some 8.4 million taxpayers paid more than $738 million in fees taken for refund anticipation loans. In essence, taxpayers wind up paying the loan issuers interest on what is their money.
"We no longer see a need for the debt indicator in a world where we can process a tax return and deliver a refund in 10 days," said IRS Commissioner Doug Shulman. "We encourage taxpayers to use e-file with direct deposit so they can get their refunds in just a few days."
DOR agrees for all the reasons we outlined earlier this year in a statement urging taxpayers to file electronically and to forget about refund anticipation loans. Why pay interest on your own money?
Why do most Massachusetts taxpayers file electronically? Lots of good reasons. posted on Mar 17
If you haven’t filed your Massachusetts personal income tax return, there are very good reasons to consider e-filing. Millions of taxpayers have already taken advantage of e-filing, the most convenient way to get your taxes done. Why are we confident that e-filing is the very …Continue Reading Why do most Massachusetts taxpayers file electronically? Lots of good reasons.
MassTaxConnect for Fiduciary Taxes – Get Started on December 5, 2016! posted on Nov 14
With WebFile for Income Stepping Aside, MassTaxConnect Steps Up MassTaxConnect, the Commonwealth’s new tax revenue system, will be expanding to include fiduciary and other taxes on December 5, 2016. As you may already know, WebFile for Income is now officially closed as we prepare to …Continue Reading MassTaxConnect for Fiduciary Taxes – Get Started on December 5, 2016!
November 6: WebFiIe for Income Makes Way for MassTaxConnect posted on Nov 4
WebFile for Income says goodbye as MassTaxConnect welcomes more taxpayers In anticipation of MassTaxConnect expanding to include 10 additional tax types, WebFile for Income will say goodbye to users on November 6 at midnight. Save the date – pay bills electronically through November 6 If …Continue Reading November 6: WebFiIe for Income Makes Way for MassTaxConnect