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Instant Tax Service Rolls out a Free RAL

Adam Rust's picture

Posted January 22, 2013

This year, Instant Tax Service stores have free refund anticipation loans.

Do you believe that? Let me know if you do. As they say, there is a bridge in Brooklyn...

I have called more than a few Instant Tax stores. Everywhere I go, I get the same answer.

"This year, our loan is free. The loan is interest-free. There is no fee for the loan. You can get an advance on your refund. When your refund comes back, you pay us back the amount of the loan."

Well shucks, I am amazed. Last time I heard, just about everyone was forced to obey the time value of money. Granted, this year the time value of money is just about nothing, but then again, the time value of money is closer to zero in only the instances of when you are seeking a risk-free return. So, maybe free RALs at Instant Tax are a downstream benefit of the temporary resolution of the fiscal cliff. Then again, maybe RALs at Instant Tax are not actually free.

One possibility - and I'm just throwing it out there - is that there could be some cross-subsidization of fees coming from the RALs and going over to the tax preparation schedule. That is not possible to confirm, though, because no Instant Tax store is willing to release pricing for their services.

The consistent response that I received (paraphrased): "We don't know how much it will cost until after we are done doing your taxes."

"Well, do you have a list of fees per schedule?"

"No, I'm not even sure myself. When I do your return, the computer tells me the price."

"Offhand, what if I have a w-2, I'm not itemizing, and I expect to get the Earned Income Credit?"

"No, I'm really not sure. Why don't you bring in your forms and we'll find out?"


One more surprise: in years past, getting a RAL has been difficult. Tax Tree, the finance arm of Instant Tax, turned down scores of filers last year.

Recently, one franchise owner contacted me about the upcoming tax season.

'The joke in the franchise community," he said, "is that we run a 'denial program." because the program is underfunded."

On the face of it, Instant Tax preparers report that they are offering advances of between $200 and $1,000. However, you have to do your taxes with Instant Tax before you can get a loan decision.