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Mo' Mo' Money Trouble

Adam Rust's picture

Posted December 12, 2012

The Department of Justice is going to bring a civil action against the owner of a Mo' Money Taxes franchise in Nashville, Tennessee and against his girlfriend who worked in his store as a tax return preparer.

The prosecution says that they initially took notice of the work of Toney Fields and Trumekia Shaw when they learned that 100 percent of the 1,218 and 1,131 returns filed from their office in 2010 and 2011 claimed a refund. In 2009,

The Twilight of RALs at Pacific Capital

Adam Rust's picture

Posted November 4, 2009

Yesterday's earnings report at Pacific Capital was, at best, a mixed bag.  Pacific Capital lost 87 cents per share.  They were expected to lose 80 cents per share, but then again, last quarter they lost $7.77 per share, so maybe it is a vast improvement.

CEO George Leis was optimistic about their quarter.

"The aggressive approach we took earlier in 2009 towards resolving our problem loans helped drive a substantial decline in our credit costs, particularly in the construction and land portfolio, said Leis in a prepared release.  "While our credit costs still remain elevated above historical levels, we are encouraged by the moderation we experienced in the third quarter."

Gee, that's swell.  Lose $41 million, call it encouraging.

This earnings report should concern shareholders not just at Pacific Capital, but also franchise owners and shareholders at their RAL partners, Jackson Hewitt and Liberty Tax Service.

Unusual Accounting

The problem for PCBC is that they don't have much more room for more losses.  Shareholder equity is now just $397

Handy Fact Sheet on Refund Anticipation Loans

Adam Rust's picture

Posted October 14, 2009

5.8 million – RALs made by the three largest RAL providers in TY 2006:

  • Jackson Hewitt – 1.3 million
  • Liberty Tax Service – 0.3 million
  • H&R Block – 4.0 million

Corporate investors: Pacific Capital Bancorp, Republic Bank & Trust, JP Morgan Chase Bank, River City, and HSBC.

8.67 million: Number of RALs originated in TY 2007:

$901 million:  Fees on RALs originated during that year.

$336 million: Additional money spent by taxpayers on the new refund anticipation check product.

Three to Nine Days: time saved by getting a RAL, as opposed to using IRS e-file service.

Leave the Minimum Wage Alone - Add to the EITC

Adam Rust's picture

Posted July 24, 2009

The minimum wage is nice, but there are more efficent ways for the federal government to prevent poverty. We should think again about another increase to minimum wage, and instead think about putting more dollars into the Earned Income Tax Credit (the "EITC.")

We like increasing the minimum wage because it enhances the livelihood of the poor, but it is not a welfare program.  It still requires that people work.

That said, its hardly the most direct way of targeting low-income working households.  The Economic Policy Institute suggests the minimum wage hits low-income households narrowly.  In a recent report, they estimated that almost two-thirds (63 percent) of gains from a minimum wage increase go to workers in the bottom 40 percent of income.

But what about the other 37 percent?  Well, that's the first part of the problem.  Many of the other


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