IRS move on debt information will cost tax preparers

The Internal Revenue Service has dealt a hard blow to a tax product that has long needed to be knocked out.
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Starting with next year's tax filing season, the IRS says it will not provide tax preparers and financial institutions with important debt information on taxpayers that allows the companies to arrange or make refund anticipation loans, or RALs.

A RAL is a short-term loan backed by a tax refund. It lasts until a person's refund arrives.

Since the 1990s, the IRS has provided to tax preparers and associated financial companies a "debt indicator" as a way to determine how much of a refund might be taken by the government.

The debt indicator is key in the underwriting of RALs, a security the refund will cover the loan.
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http://www.lansingstatejournal.com/article/20100822/NEWS03/8220612/1004

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