You may remember getting your tax refund the same or next day after you file. In 2011, you may not have that option. In previous years, tax preparers have often offered Rapid Refund and Refund Anticipation Loans, or RALs, to clients. But, in 2011, tax preparers will have fewer refund options for clients due to tax law changes.
Tax preparers were able to offer Rapid Refund and Refund Anticipation Loans when partnering with a bank or lending institution to have the funding available for clients. With the tax law changes in 2011, the debt indicator provided by the IRS to lending institutions was removed. What does this mean? Your debt indicator was provided to banks and lending institutions when you applied for Rapid Refund and Refund Anticipation Loans. The debt indicator alerted the bank or lending institution processing your Rapid Refund or Refund Anticipation Loan if you had any outstanding federal debt including unpaid child support, unpaid student loans, outstanding federal and state taxes, or unpaid veteran affairs debt.