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