Daniel Akaka: “Certain tax preparers are lining their pockets with money that should be going toward the everyday needs of lower income…”

“Certain tax preparers are lining their pockets with money that should be going toward the everyday needs of lower income families. These preparers are taking advantage of those that have sought assistance in claiming the Earned Income Tax Credit, EITC, by successfully marketing to them to obtain refunds through exorbitantly priced refund anticipation loans, RALs. An estimated $1.75 billion intended to assist low-income families went to commercial tax preparers and affiliated national banks for tax assistance, electronic filing of returns, and high-cost refund loans in 1999, according to a report published by the Brookings Institution. In 2001, 40.7 percent of taxpayers who earned the EITC received their refund through RALs. The States that had the highest percentage of EITC returns with RALs included Mississippi, 61.5, South Carolina, 58.9, Georgia, 57.6, North Carolina, 57.5, and Louisiana, 56.8.”