READ the full report, including a list of resources and free tax preparation resources for taxpayers.
Boston – As tax filing season begins, advocates from the National Consumer Law Center (NCLC) issued their annual consumer advisory on taxpayer consumer protection issues. These include:
- Tax-time financial products. Lenders and tax return preparers again team up to sell refund-related products and services to taxpayers. Interest rates on refund anticipation loans (RALs) have increased on several products.
- Inability to comparison shop. With one notable exception, tax preparers continue to ignore consumers’ preference for up-front pricing for tax preparation services. This secrecy stifles competition and results in higher fees all around.
- Private debt collection: The IRS private debt collection program continues to delivers vulnerable, elderly, and low-income taxpayers into the hands of private debt collectors. Some relief is coming but not fast enough for struggling families.
Advocates warn that consumers need to be on guard as they navigate this filing season. “Tax time is such a challenge for low-income and other vulnerable taxpayers,” said Michael Best, staff attorney at the National Consumer Law Center. “Taxpayers just trying to get refunds they are owed face an obstacle course starting with incomprehensible forms and tax laws and ending with profit-seeking preparers and lenders looking to intercept a piece of their refunds.”