New IRS program

[thomtax]

This was copied from The Progressive Accountant:

WASHINGTON - The U.S. Department of the Treasury is planning a pilot program of direct deposit of tax refunds for low- and moderate-income individuals. It would enable them to open new accounts that can be accessed via debit cards.
The announcement was a direct slap at what were called "high-cost alternative financial products," in a prepared statement Michael S. Barr, assistant treasury secretary for financial institutions. He cited "check-cashing and other services." While he didn't mention refund loans, his statements almost certainly encompassed those.

The department will use direct mail and payroll outreach to spread word of the program. Direct mail will be sent to low- and moderate-income indivudals who have received paper check refunds and have not provided bank account information to the department. In the payroll program, there will be insert offers for those not currently using direct deposit for tax refunds.

LT

[gkaiseril]

As good as this sounds, there are just too many taxpayers that do not have the money or even the credit to pay for the tax preparation service and can not wait 2 -3 weeks for the refund deposit and the ATM card.

How much money will the use of the ATM card cost the taxpayers?

Anywhere from $1.50 to $5.00 per transaction?

So the banks will get their fees in mulitple smaller amounts and in the end collect even more in fees.

It looks like a lot of smoke an mirrors.

Reminds me of the question "How do you know if a politician is lying?"

Answer: "His/Her lips are moving."

[taxmandan]

It would enable them to open new accounts that can be accessed via debit cards.

Open new accounts where? At a bank? Low income clients often cannot have bank accounts due to past bad cash handling problems. That's the main reason they resort to check cashing places. Is theIRS going to force a bank to open an account and are they planning to protect the client from garnishment of the refund by the bank to cover past due overdraft charges? And what will be the setup fees, and monthly fess charged for this account? Are we going to have to get the client to sign the form to waive overdraft transfers under the new credit laws just enacted? Bunch of nonsense from the bureaucrats, again.

[MAJ]

Nah... THey're gonna make money!!

Nah. Here's what I see.
The IRS enters into a deal with 'XYZ Company Bank Inc LLC XYZ" to supply the management of these accounts and debit cards. The IRS will funnel billions of dollars through this 3rd party 'outsourced' company. Since it's a debit card the money may NOT get cashed out right away. So the money lingers.. Billions.. That's how the banks make their money right? On float? So... Here's a grand scale. Who wouldn't enter into that contract? Federal monies - guaranteed - 'x' year contract. And whoever wins the contract does not know one senator or congressmen - honest.

So, the gov't isn't forcing anyone to open accounts. They're not going to let these crook companies charge insane fees for RAL's and other stuff - NO! We're not going to let them get ripped off by check cashing places. NO! We're going to protect you the people from these unscripulous people taking advantage of people. New rules - fair for all!! In the process we'll be providing more jobs.

Ok.. So - How can you tell when a politician is lying? Lips are moving (I liked that one) -
Well, yes.. AND NO! - you see - that paragraph above was written in Bull $tuff.. The political swing on it is.

We can funnel billions of dollars into mini debit card accounts for various taxpayers. No sense in helping the people establish accounts and gain credability. Uncle Charlie will make tons on the float! Why let all those companies make all these fees when we can control it all push the money where we want to! Hopefully we'll save the taxpayers some money & Uncle Charlies ready, willing & able to help the IRS! It's a win, win!

Oh wait -- did I type that out loud??

.

[FEDUKE404]

Another Washington pipe dream

The Washington bureaucrats are (again) missing the picture.

Having in the somewhat recent past worked in a store-front operation, my observations have some basis.

The vast majority of the EITC/RAL crowd want their money now. They don't care how much extra it costs - oh yes, they're frequently playing with the IRS "house money" anyway. Even if they receive a check, they then will go to the closest check cashing service and fork over some more funds just so they can possess that cold cash.

Most of these folks do not even have bank accounts (that they will admit to) and then.....reread the paragraph above.

Even the very, very few who do choose a debit card frequently manage to muck things up, no matter how carefully you explain the extra costs for ATM transactions, excessive balance inquiries, and most importantly what happens if you actually lose the doggone card.

FE