IRS Debit Card

[taxmandan]

TheIRS announced that people who don't have a bank account for direct deposit will be sent a debit card with their refund on it. Pilot project says 600,000 low income people will receive the cards this year. Wonder when the person will learn that this will be the case or if they can opt out of it and receive a check?

[Lion]

Letters

The IRS is sending letters to those to whom it is making the offer explaining the details. Some will have better benefits than others. The IRS is testing to see which benefits will entice people to use the cards instead of having a paper check mailed to them.

[taxmandan]

There's no mystery about the best incentive: get the refund to the taxpayer within 48 hours of acknowledgement of the return and everyone will be happy.

[rgtaxservice]

There's no mystery about the best incentive: get the refund to the taxpayer within 48 hours of acknowledgement of the return and everyone will be happy.

That would really level the playing field and put a huge hurting on the national chains.

As for me - long ago I came to terms with the fact the HRB has 16% of the market cornered while I hold a .00000173% share (based on 97,788,000 professional returns prepared in 2010).

BIG sales meeting tonight.

[JohnH]

Good statistic.
What I don't understand is why I prepare .00000173% of all the returns, but I only seem to charge .00000003% of all the fees.

(Big finance committee meeting coming up)

[spanel]

There's no mystery about the best incentive: get the refund to the taxpayer within 48 hours of acknowledgement of the return and everyone will be happy.

Not this year... still 8-15 days. Also.. how is this gonna help if they cant afford to pay upfront for thier fees?

Chris

[erchess]

Chris

It isn't in place for this year but the IRS has talked about withholding a fee and sending it to us if the taxpayer agrees. Probably there will be a limit on what we can charge for a given return but I think the big chains have enough clout to keep the limits loose enough for me.

[PIGLEE]

I think IRS has been thinking ahead on this, right now you can deposit your refund into more than one checking account. But I am sure being able to deduct our fees (into our account) will open it up to a lot of fraud, probably why they are talking about limits on amounts. But they need to do something or tax preparers will not support the program.

[FEDUKE404]

But...

...can you use a debit card for lottery tickets and a few other "necessities" of life ??

I remember several years ago when I worked with a "chain" and they were urging such cards on clients....so they would not have to deal with printing a check/return visit to office...most of whom had no bank accounts in the first place (or so they said).

We spent more time explaining what happens after they had "lost" a card, or why they were getting whacked with ATM charges for checking their balance every hour or so, or making frequent $20 withdrawals from said ATMs.

In theory the IRS idea makes some sense, but in practice it will crash and burn. It's the same concept of why many folks (especially of the January-filing EITC crowd!) will GLADLY pay big bucks just to get their refund a few days "early." The major firms know this and laugh all the way to the bank from the fees they collect.

FE