SC Class Action Lawsuit Needed

[dyne]

I would like for someone to file a class action lawsuit against the State of South Carolina regarding their DEFAULT of sending a DEBIT CARD instead of a paper tax refund unless the taxpayer checks a block to NOT receive a debit card.
I consider this to be a disgrace!

[Gary2]

There are some states that won't send a check at all. It's direct deposit or debit card, period.

What exactly are the damages that would justify a law suit?

[FEDUKE404]

Agreed

There are some states that won't send a check at all. It's direct deposit or debit card, period.

What exactly are the damages that would justify a law suit?

I tend to agree with Gary2. That would make for an interesting lawsuit.

SC is just getting a jump on things, consistent with "some states" referenced by Gary2.

Remember when there were just a few tax pros who would even consider efiling?

FE

[dyne]

I am not an attorney but I believe that S. C residents are being taken advantage of by South Carolina dragging out the payment of the tax refund by using the DEBIT CARD when the taxpayers should immediately receive the full payment in the form of a paper refund check. If S. C. had an option for the taxpayer to SELECT to option to obtain a debit card I could not complain. But instead it is set up as a DEFAULT so that the debit card will be received unless the taxpayer OPTS OUT by checking a box which is purposely hidden away on page 2 of the tax return so that it will easily be overlooked. Many taxpayers are entitled to large state refunds approaching $2,000 or more and it would take them a long time to spend that much money by using a debit card and during that time S. C. will keep the funds. And the website which brags about the debit card states that BANK FEES may be charged against this debit card and WILL be charged DAILY! I suspect that many taxpayers will overlook this option to OPT OUT of getting the debit card and will be upset when they receive a debit card instead of a paper refund check

[okie1tax]

Lawsuit

While we're at it, why don't we file a lawsuit for making us wait until after we file a tax return to refund our money that they have been using all year? Or maybe for sending us paper of of gold or silver?

[Y2KEA]

If there is a balance due, can I send them a debit card?

[Burke]

Wow. Thanks for the heads up, as I am getting ready to do a SC return in a few days. Guess you got caught flat-footed..... will now contact my client and give him the news.

[FEDUKE404]

Don't really see a problem with the choices available

Although it is unlikely I will prepare a SC return this year, I went looking at the SC web site and forms.

At the bottom of page 3 of SC1040 there is a checkbox, which apparently has to do with those who would otherwise receive a paper check.

Page 8 of the instructions further explains the options.

But there is no problem for those requesting a direct deposit.

It would appear to me that a professional preparing SC income tax returns should easily be able to deal with this "problem" for their clients.

FWIW: Even if you do end up getting the debit card, the fees/restrictions are de minimis as explained here: http://www.sctax.org/Tax+Information...ogOverview.htm . And if you are a BofA customer, you even get breaks on ATM withdrawals.

FE

[JohnH]

I just noticed this last week when I completed my first SC return. I guess checking that box is aonther thing that goes on my final checklist.

[dyne]

What gripes me is that it is a DEFAULT that the taxpayer gets a DEBIT CARD unless he or she or they checks the block to NOT get the debit card. Out of 185 clients for whom I have efiled SO FAR this filing season, NOT ONE wanted the debit card. NO, I did not get caught letting even one client get caught with this issue! It should NOT be a DEFAULT, it should be an option IF the client DESIRES a debit card. This is another example of South Carolina imposing upon the residents.

[S T]

Maybe it is your software -- Just a thought!

Sandy

[dyne]

I contacted Drake Tax Software when I first encountered this issue and they advised me
that South Carolina had specifically stated that the software COULD not make a global
election or election to OPT OUT for all clients. Again this suggests that South Carolina
is purposely attempting to take advantage of the residents.

[Snaggletooth]

Banking Lobby

Don't be surprised if the big winners in this scenario is your state's banking system.

I think the "damages" asked about would be the fees. If the taxpayer receiving the card is charged FEES, then this is seven times more abhorrent than it is to begin with. My guess is that when the card is used, the retailer is already having to pay their usual fees.

There needs to be an education process to educate taxpayers and also investigate how this situation became law. My guess is that it was not voted on by the SC legislature but instead sailed through some regulatory committee. That's how easy big powerful financial interests can get things done, when YOU can't get them to fix a pothole.

From the perspective of SC govt, it makes sense:
1) Schmooze up with the banking lobby
2) Stimulate the economy (supposedly)
3) Dribble out the refund over weeks/months instead of
having to disburse cash quickly.

I think there COULD be a class-action lawsuit if card fees were charged to the taxpayer. But remember, the defendant would not be some deep-pockets corporation, but would be the State of South Carolina. Not the best scenario for success...And if the lawsuit has a chance, it should go through Federal Court. Not a chance in a SC court.

[dyne]

There are at least EIGHT fees of up to $30 which CAN be charged DAILY against your
debit card.

[FEDUKE404]

Why all the fuss?

What gripes me is that it is a DEFAULT that the taxpayer gets a DEBIT CARD unless he or she or they checks the block to NOT get the debit card. Out of 185 clients for whom I have efiled SO FAR this filing season, NOT ONE wanted the debit card. NO, I did not get caught letting even one client get caught with this issue! It should NOT be a DEFAULT, it should be an option IF the client DESIRES a debit card. This is another example of South Carolina imposing upon the residents.

Well, much of the government (and private) agencies are already making paper checks (and even food "stamps") a thing of the distant past. Probably will be in a decade of so..... I even got a "rebate" from my cell phone company and....it came as a debit card.

Of course, as mentioned earlier, the simplest solution is to have a direct deposit and then this perceived problem immediately vanishes.

Otherwise, I don't personally see a real problem with what SC is doing. Take a look at the actual form (page 3 of http://www.sctax.org/NR/rdonlyres/97...0_09132011.pdf) and the applicable "box" is maybe an inch or so away from the signature lines. I would assume professional tax software would also run this question by the otherwise uninformed professional preparer??

Oh yes - take note (same area of form) of the SC notice regarding forthcoming Forms 1099-G/INT for any payments made by SC. This same discussion may resume next year?

FE