New Job for Mark Ernst

Mark Ernst has taken a new position as Chief Operating Officer and Executive Vice President at Fiserv. Ernst starts this week. Ernst has most recently served as Deputy Commissioner of the IRS. Prior to that, he was the CEO of H&R Block. Fiserv provides technology solutions in the financial space.

Looking Back

Ernst seems destined to be remembered as the person that ended the debt indicator. That decision, while certainly not his alone, has disrupted the tax prep industry. Critics of his decision argue that it didn’t protect the consumers that it was designed to help, because it led to increases in the cost of RALs. Supporters assert that it made no sense for the IRS to underwrite high-cost loans.   They said that it is bad enough that the RAL consumer is overwhelmingly poor, but it is even more problematic that many of those refunds were the result of the Earned Income Tax Credit.

Ernst promised that the IRS would have a better alternative for the 2012 tax prep season.

One of those ideas had been a split refund. Although the details were never specific, such an idea would have given filers the right to designate a portion of their refund for the preparer. Since the preparer would then hold an obligation from the Treasury, the risk would have been minimal. If the split refund had capped the designated portion at $150, as had been floated, then it would have had the second effect of putting downward pressure on pricing for basic returns.

The split refund has not yet been enacted. It will be interesting to see what Shulman does in the near future. The settlement question still remains unanswered. Although consumer groups have had a big impact on who offers RALs, they are still in the marketplace. Filers can get RALs at both Liberty and Jackson Hewitt, and Block will offer its own Emerald Loan.