Journal Article

Alternative Refund Settlement Products May Compromise Asset-Building Goals

Abstract: High-cost, short-term loans such as the refund anticipation loan (RAL) have historically been popular with low-income filers. RALs are based on the taxpayer's expected refund and are issued at the time of filing. They allow the taxpayer to receive an anticipated refund earlier, in the form of a loan. These products have often been associated with high prices and extra filing costs. Nationwide, 7.2 million taxpayers received RALs in 2009, and 87 percent of those were low income.

Keywords: income tax; loans;

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: e-Perspectives

Publication Date: 2013

Volume: 13

Issue: 1

Order Number: 2