Jackson-Hewitt not offering fast refund loans?

I am an H&R Block Tax Associate. The answer to your question is, yes, H&R Block does offer the Refund Anticipation Loans. You can recieve your loan in a few minutes to 2 days. There are other ways to receive your refunds that are not loans and therefore less costly if you can wait 8-15 days. Please contact your local H&R Block office for more information. To locate an office near you, go to www.hrblock.com.

There is some truth to this rumor. The Office of the Comptroller of the Currency told Santa Barbara Bank & Trust on Dec 18, 2009 that the lender would not receive regulatory approval to originate the refund anticipation loans in 2010. SBBT is Hewitt's principal source of RAL money and unless they can find another partner bank to issue the RALs, Hewitt won't be able to offer them. See these links:

http://www.nytimes.com/2009/12/25/business/25jacks...

http://www.snl.com/irweblinkx/file.aspx?IID=100652...

SBBT is in weak financial condition and needs to raise capital quickly or risk takeover by banking regulators. For this reason they are trying to sell of the subsidiary arm that does the RAL niche loans in order to raise capital.

Despite high fees and interest rates, RALs are not a cash cow for banks. Many have suffered heavy losses in recent years when expected tax refunds were denied by the IRS and the taxpayer didn't have the funds to pay off the loans. For this reason, the banks that are continuing to offer them have cut back on the amounts that they are willing to lend to the portion of the taxpayer's refund that is comprised of excess tax withholding. Most if not all of them will no longer advance refundable credits such as the Earned Income Credit or First Time Home Buyer Credit because of long delays in issuing the refunds due to the IRS' anti-fraud procedures.

The RALs are designed and priced as a very short term loan (one to two weeks in most cases) but refundable credits are taking 4 to 5 months for the IRS to process in many cases. Once refundable credits are stripped out of the mix, the "average" tax refund drops from around $2,600 to less than $1,000. That further shrinks the amount of revenue that the banks can generate with these short-term loans.

The reality for most taxpayers is that the RALs are a major rip-off. If you have a bank account, the RAL only gets you your money a week or so faster than having the money sent directly to your bank by the IRS. Unless you are facing immediate eviction or have hungry children at home, no food, and no money to buy food, RALs are a terrible idea for the taxpayer.

The average taxpayer would be much better served by filing an accurate W-4 with their employer, filing a W-5 if they are eligible for the EIC, and having the proper amount of tax withheld. This puts more money in the taxpayer's hands every payday and reduces or eliminates the need to rush out and get an expensive loan to catch up on overdue bills.

If all that you're going to do with that RAL is buy a new flat-screen TV set, then the RAL is the height of financial irresponsibility. It would you cost far you less in the long run just to borrow the money for the TV if you "have" to have it immediately and then just pay off the loan when your tax refund is deposited to your bank account.

The number one financial institution that "backs" most RALs is Santa Barbara Bank & Trust {SBBT} and they are still offering RALs for the coming tax year. I have a hard time imagining JH simply not offering them...it's too big of a money-maker to just ignore.

But the bigger question is WHY are you paying such huge fees to have one of the Tax Shacks prepare your returns when you could save hundreds by using an independent tax professional? Most professional tax preparers belong to the National Association of Tax Professionals [N.A.T.P.]. NATP has a zip-code searchable database of their members. Click on the first link below to visit their search engine. Input your zip code and a radius you wish to search whithin and PRESTO!

G'Luck...

Mike Womack, Sr. Partner

Zero Degrees Tax LLP

Moore, OK

Lawton, OK