Some tax refunds can come with hidden fees, government report warns

Source: CBS News

November 26, 2024 / 5:25 PM EST


If a tax preparer offers you a tax refund product such as a refund advance loan or anticipation check, experts advise to first read the fine print.

That's because nearly 16% of American taxpayers paid more than $842 million in fees to receive their 2023 refunds. Of those, about 96% used a refund anticipation check, or RAC, the Treasury Inspector General for Tax Administration estimated in a report last week. Another 4% used a refund anticipation loan, or RAL.

These products can appeal to taxpayers who are eager to get their refunds and who don't want to wait days or weeks for the IRS to deposit the money into their accounts or cut a check. And while the seven tax return preparer companies that account for almost 80% of the total refund products are "largely complying with applicable guidance, not all information was clearly available for consumers," according to the agency's review of their websites.

"In some instances, fees and cost information for these products were not clearly advertised, and it required reading the fine print or going through multiple pages to find some cost information," it stated.

Read more: https://www.cbsnews.com/news/tax-refund-hidden-fees-advance-loan-anticipation-check-government-report/