The Treasury Inspector General for Tax
Administration (TIGTA), as part of its FY 2008 audit plan, will
interview, via survey, a valid sample of individual taxpayers who
received Refund Anticipation Loans (RALs) after submitting
electronically filed (e-file) tax returns. RALs target low-income
taxpayers, especially those who receive an Earned Income Tax Credit
(EITC) or who do not have banking accounts. Because the duration of
a RAL is approximately 7-14 days (the difference between the time a
RALs are obtained and when they are repaid by with taxpayers
refunds), fees for these loans translate into triple digit
annualized interest rates. While the IRS has eliminated the
marketing of RALs from its Free File Program, educating taxpayers
about the cost and burden of RALs and the ability to receive
refunds quickly without RALs would further help reduce the
financial burden RALs place on taxpayers. In addition, this data
will help in learning how RALs affect tax administration, what
changes are possible and could be taken to better monitor e-file
providers, and what actions could be taken to mitigate burden
through taxpayer education and/or changes to the administration of
the tax system.
The subject Treasury
Inspector General for Tax Administration (TIGTA) audit must be
completed by January 31, 2008, in order for TIGTA to provide
insight on actions that can be taken to better educate taxpayers
and to determine the impact Refund Anticipation Loans (RALs) have
on taxpayers and tax administration. If TIGTA cannot complete the
survey prior January 31, 2008, we will not have the data to
determine the burden and risks of RALs before most taxpayers file
their 2007 Federal tax returns. Gathering this information prior to
January 31, 2008, will allow the IRS to issue alerts to taxpayer on
the burden and risks of RALs before most taxpayers file their 2007
Federal tax returns. In addition, collection of this information is
necessary to determine the accuracy of the IRS records which should
indicate which taxpayers obtained RALs.
The Treasury Inspector General
for Tax Administration (TIGTA), as part of its FY 2008 audit plan,
will interview, via survey, a valid sample of individual taxpayers
who received Refund Anticipation Loans (RALs) after submitting
electronically filed (e-file) tax returns. RALs target low-income
taxpayers, especially those who receive an Earned Income Tax Credit
(EITC) or who do not have banking accounts. Because the duration of
a RAL is approximately 7-14 days (the difference between the time a
RALs are obtained and when they are repaid by with taxpayers
refunds), fees for these loans translate into triple digit
annualized interest rates. While the IRS has eliminated the
marketing of RALs from its Free File Program, educating taxpayers
about the cost and burden of RALs and the ability to receive
refunds quickly without RALs would further help reduce the
financial burden RALs place on taxpayers. In addition, this data
will help in learning how RALs affect tax administration, what
changes are possible and could be taken to better monitor e-file
providers, and what actions could be taken to mitigate burden
through taxpayer education and/or changes to the administration of
the tax system.
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
Attachment A_Refund Anticipation Loans.doc
Refund Anticipation Loan - TIGTA Questionnaire