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RALs, RACs and Superheroes

RALs, RACs and Superheroes

Refundo: Mild-mannered software programmers by day, superheroes by night?


The needs of the ordinary taxpayer — especially the underbanked and unbanked — have for too long now gone unmet.  Junk fees, hidden costs, and exorbitant rates for routine tax preparations act as financial disincentives for those who would otherwise save or invest and needlessly penalize those who are just trying to make ends meet.  To make matters worse, the ones hardest hit by these unnecessary charges are often those who can least afford it.  A recent study by the US Treasury Department has found that the people most reliant on Refund Anticipation Checks (RACs) and Refund Anticipation Loans (RALs) to get quick cash are single parents, young adults, immigrants, active military personnel, and the working poor.

So what are the RALs and RACs, precisely? Let’s go with the textbook definitions, here offered courtesy of the Office of the Comptroller of the Currency:

RAL = “Refund anticipation loans (RALs) are bank loans secured by the taxpayer’s expected refund.”

RAC = “Refund anticipation checks (RACs) are temporary bank accounts established on behalf of a taxpayer into which a direct deposit refund can be received.”

If RALs and RACs provide these services, then what exactly is the problem? How do these services take advantage of those they are ostensibly designed to benefit?

First of all, while they offer an advance on one’s anticipated tax refund from the IRS, such programs are riddled with opportunistic technology and convenience costs, unseen fees buried in the fine print.Even then, RACs don’t usually lead to a speedier receipt of one’s tax refund, unless of course the person in question doesn’t have a bank account (in which case they tend to arrive considerably faster).  Where RACs still do come in handy is in paying for specialists to take care of one’s taxes for the year.  The only downside to this, however, comes with the tax preparation fees they incur, paid to the bank handling the check as well as the firm filling out the taxes.

Meanwhile, RALs — which in the past actually did work to expedite the refund process — are now largely going the way of the dinosaur.  Due to changes in the legislation, even those few banks that are equipped to handle RAL transactions aren’t accepting them at this point.  Nevertheless, though options for the un- and underbanked (the underserved) have narrowed, the demand remains as strong as ever.  All this has led to the search for a cheap, reliable, and convenient alternative — one that works to the advantage of both the taxpayer and the tax preparer.

So what is to be done if these services aren’t to be abandoned entirely?

Never fear! A new kind of superhero is here.  What’s there in the sky? — A bird? — A plane? No, it’s Refundo! Faster than a speeding bullet, Refundo will find the quickest way to process your refund so you can have it returned to you at earliest convenience.  Refundo to the rescue! (Up, up, and away!)

No, we’re not superheroes — though we do come from the super hero capital of the universe (New York City). Refundo brings a breathe of fresh air to the ones who need it the most. Taxpayers who do not have bank accounts or who do not have the means to pay for their tax preparation can benefit immensely from our products.  The tax preparers also benefit by offering Refundo products, otherwise these clients would not have the means to do business with them.

One thing is for sure, if you receive or if you offer a “Refund Anticipation Check” and it doesn’t say Refundo on the top left, you paid junk fees! You don’t have Refundo. You just got duped.

Topics: Refundo, ERO, Tax, tax preparer, superheroes, Junk Fees, RACs, RALs, taxpayer


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