Find us on Google+

Ask the taxgirl: Refund Anticipation Loan (RAL) Denials and Delays

January 26, 2009 · 65 comments

Taxpayer asks:

Why was my RAL denied?

Taxgirl says:

RALs are refund anticipation loans. They are basically loans (usually high interest) against your refund from the IRS.

I am not a fan of the RAL. In many cases, I think they’re oversold to folks who can least afford to pay the fees when a normal direct deposit refund would be available within about 10 days for taxpayers who e-file. But I digress.

RALs are private loans to taxpayers. In many cases, the marketer of the loans, such as a tax preparation service, is not the same as the lender.

The IRS does not impose a fee for a refund either by direct deposit or check. However, the tax preparer may impose a processing fee for a RAL and the lender may impose a fee and/or interest. According to Americans for Fairness in Lending, the average RAL lender fee is $100. The interest rates for a RAL ranges from 40% to 700% depending on the size of the refund.

Not all RALs are subject to credit checks, though they may be required as part of the terms and conditions imposed by the lender. This is because your tax refund is used for collateral – the lender is entitled to use the refund for repayment – making the loan, in theory, not much of a risk. So, credit history may be a reason for denial in some cases, but is not the most common.

The most common reasons for a RAL denial are a refund that is smaller than anticipated (many banks impose a minimum refund in order to qualify) or a refund that has been offset. Examples of offset refunds are back taxes, child support obligations and outstanding student loans.

Additionally, your RAL may be delayed if you have large EIC amount and no prior year history. In that event, you will be asked to substantiate your claims.

If you are denied or delayed, you may request that your RAL application be reviewed again.

However, there are two situations where a review will not produce a different result:

1, Since banks are anticipating a higher than usual volume due to the Rebate Recovery Credit, some banks are choosing not to allow RALs that include a refund based on the Rebate Recovery Credit. I have heard that Republic Bank has instituted this rule. If you know of others, let me know.

2, Members of the armed forces on active duty are prohibited by federal law from receiving most RALs due to restrictions on interest rates. Apparently, H&R Block has created a Military Refund Anticipation Loan, which keeps the total amount of interest and fees below 36% (yes, that says 36%) in order to allow them to continue to issue RALs to active duty.

All of that said, you are usually liable for the bank and loan fees, even if your RAL is eventually turned down. If your loan is approved but you don’t receive a large enough refund to cover the cost of the entire loan, you may still required to pay back the loan.

The bottom line is that these are private loans and as private loans and if you use these services, you’re subject to their terms and conditions. I can’t make you not use these products. I wish that I could. But I do hope that you’ll ask the right questions and make smart decisions. Don’t get ripped off.

Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.

Have a question? Ask the taxgirl!Now on Facebook!

Similar Posts:

{ 64 comments… read them below or add one }

1 Adam January 26, 2009 at 10:07 pm

I am working for H&R Block this season. We are not allowed to provide military members RALs. I have not heard of the military RALs.

2 Kelly January 26, 2009 at 10:25 pm

Hey thanks for the note, I appreciate it. I’ve emailed my contact at H&R Block for confirmation. Some of my colleagues were referring folks to H&R Block because of these so-called Military RALs. If that’s not the case anymore, that’s definitely good to know.

3 Paula January 27, 2009 at 8:44 am

I have worked for H&R Block for 18 years now. There is a military RAL loan available, just not in all offices. Our district has 1 office that is able to do them close to the military base. Our interest rate for RAL’s is 36%. The IRAL’s (same day) the interest rate is higher.
The last we heard it is now the IRS who is not releasing funds for the Rebate Recovery Credit. We were told that the entire refund could be held up as well. There is a work around for that and I try to inform my clients so they can make an informed decision.

4 Pam January 27, 2009 at 11:44 am

Chase Bank Ral will not loan against stimmulus rebate credit portion of this years return either.

5 Bob February 1, 2009 at 7:40 am

Kelly, I also work at H&R Block. We use HSBC for RALs. For a few days, HSBC was declining RALs that had a stimulus payment. Now they are just not advancing the amount of that payment. They also won’t advance any of the new homeowner credit.

6 Michelle February 4, 2009 at 12:40 pm

I had my taxes done at H&R Block this year. I did get the RAL (ughhh), and got some money up front. I’m still expecting over half of it,(the non-loan portion) and the IRS says it was direct deposited on Friday January 30th. HSBC still claims that they haven’t received it, which is BS. The IRS rep TOLD ME that the funds were released and confirmed the funds were received by HSBC.

I called H&R block and they told me that HSBC will not release funds until 2/16. They are blaming the IRS. They said that HSBC HAS the funds but the IRS placed ‘stipulations’ on the funds and they don’t know why.

Very frustrating.

7 megan February 5, 2009 at 3:28 pm

I was denied RAL from chase bank they had said some like total amount of tax payment and the amount of tax return. and they could not tell me what all that means. I had a perfessional do my taxs this year so it could be there mistake .. I just want to know what is wrong . and no one can give me any answers

8 michael February 6, 2009 at 12:18 pm

hnr block of lockport ny’s mary finn told me that ral is a go as long as you have no past problems with the irs or social services- hsbc declined me for god knows what reason at this point, but i was charged over 100 dollars for a simple efile,took me 6 calls over 10 hours to that branch to get her on the phone to hear i was declined and i have to wait-furthermore i gave her a 25 dollar coupon that doesnt look to have been applied when she said it was
ive uised hnr block for most of the past 18 years and they will never get another dime from me, they lied to me and have done nothing to make it right!
I strongly reccomend you go to someone else

9 shantell February 8, 2009 at 1:15 am

Same thing happened to me this year. I have always been approved for the RAL, but this year was denied and then I was waiting to hear from hr block about my 1-2 day check, but when I didnt receive a call from them I decided to call them myself, found out I was also denied the 1-2 day return. I dont owe any taxes, though my credit isnt the best. I WILL NEVER return to hr block again. They have taken my money once and it will not happen again

10 janice February 10, 2009 at 10:43 pm

I went to Liberty Tax and was declined for the RAL as well they provided the generic 800-1040 IRS number for me to call. They said the IRS makes a judgement based on you information like names and socials matching then the bank bases it’s decision on that. Now I finally got through to the IRS who says that they are absolutely not the reason that Ididn’t get approved. Thanks to this forum I found out that I can request for my return to be re-submitted so I called Liberty Tax and had them re-submit my return. Now it is about 8 hours later and they have a check. Fancy that… they knew all along that they could re-submit it and didn’t give a care until I asked them to. huh. funny they sure don’t mind collecting the $$$ from our EIC that is for sure.
Thanks for the help!

11 Kelly February 11, 2009 at 7:39 am

Janice – I’m glad to hear that it worked out for you! I hope that other folks in a similar situation will do the same thing, request a review. It’s certainly worth a shot!

12 Frank February 26, 2009 at 2:24 pm

This message is to Adam, or anyone who can help. Who would I contact to find out why my RAL was denied? I was told that I didn’t meet the criteria, and I am also displeased because they never notified me. I had to call H&R block to find out. This is my first and last time using them!

13 ANDRA March 1, 2009 at 12:41 am

I received a RAL payment from JP Morgan Chase… I never applied for a RAL and didn’t know why it was directed deposited to me. Actuallyn i didn’t even know what it was untili got on this forum. is this the same as getting my federal tax rebate??? because if it is, the amount is wrong and what should i do?

14 Kelly March 1, 2009 at 10:35 am

I would check with your tax preparer. I’m assuming that you used a third party preparer or tax software – those folks use banks for RALs and direct deposit. Your tax refund would be less than expected if that’s the case because the fees are deducted from your refund proceeds.

15 Stephanie March 5, 2009 at 3:53 pm

Does anyone know how to contact HSBC to find out why I was denied the RAL. My husband and I owe no money to anyone. We too had to call back to H & R block to find out that our check didn’t come and they couldn’t tell us why. They gave me a number to call to check on it, and I get different answers each time I call. I called H & R block and they keep giving me the run around. They also gave me the IRS.gov website but again no help. My husband and I are very frustrated and don’t know who to turn to. If anyone has a phone number or who we can get straight and truthful answers from, please let me know. I am super frustrated and we both have agreed we will NEVER use H & R block again.

16 adam March 6, 2009 at 6:15 am

I JUST WANT A TRUTHFULL ANSWER ON WHY TWO DIFFERENT REPRESENTATIVES AT HNR BLOCK EMERALD CARD SERVICES TOLD ME THAT THE CARD I HAD RECENTLY REPORTED MISSING AND TERMINATED WAS ON ITS WAY TO BE RE-ISSUED WITHIN 3 BUSINESS DAYS TWICE UPON ME GOING TO THE MAIL BOX ON THE STATED 3RD BUSINESS DAY BOTH TIMES NOT BEING THERE. I CALLED AND GOT NOW THE 3RD REPRESENTATIVE TELL ME IT WILL BE HERE IN 3 BUSINESS DAYS – I CANT ACCESS MY MONEY AND IM GETTING LIED TO – WHAT IS GOING ON – I WANT MY MONEY SITTING FROZEN IN THIS HSBC ACCOUNT AND I CANT GET IT – THE LOCAL HNR BLOCK LOCATION I FILED AT TELLS ME THERES NOTHING THEY CAN DO – I WORK AT A LAW FIRM AND THE LAST THING I WANT TO DO IS BRING THIS INTO ADR – I JUST WANT MY TAX MONEY WHAT IS GOING WITH THESE PEOPLE

17 Lisa April 6, 2009 at 10:15 am

I actually work for H&R Block and when your loan is denied by HSBC it is completely out of our hands. We just do the taxes, we don’t have any control over you getting accepted or denied a loan. And the only number you can call is the one they give you for HSBC. If you have an issue with what HSBC is telling you then you need to take it up with them and not H&R Block. The two businesses are not connected, only for the sake of them loaning our clients money. And the criteria to be approved for a RAL is not solely based on you oweing any back taxes. It’s also based on credit. It is a loan, yes it’s based on your refund but HSBC is loaning you the amount of money of your refund. Banks these days aren’t loaning money to just anyone. Think about it people, the economy isn’t the greatest right now, they aren’t going to loan money to just anyone. Also if you have an issue with the Emerald card you have to contact H&R Block Bank NOT H&R Block where your taxes were done. We are only responsible for preparing your taxes and our hands are tied when it comes to some things. We can’t take care of everything but we do take care of what we can. Also not all H&R Blocks fail to contact their clients when denied. We do and we still get cussed out over the phone. It’s not our fault your credit was denied. I realize it’s frustrating when you don’t get your money when expected. But you have to cut us some slack, we can only do so much.

18 Kelly April 6, 2009 at 1:47 pm

It’s worth noting that this is specific to H&R Block and HSBC – some companies that issue RALs note that there is no credit concern if the RAL is large enough.

19 Nicole May 14, 2009 at 4:07 pm

(302) 327-2000 is the number for HSBC TFS Account Research 90 CHRISTIANA Rd, New Castle, DE 19720

20 ConsuelloLLewis September 4, 2009 at 6:01 pm

Im trying tofd out how can a person like me get a 800 dollar loan with no bank account at all, I have a full time job im just having a hard time right now an i need help can someone tell me how i can get help?

21 NANCY September 10, 2009 at 5:45 pm

As a Tax preparer I hear complaints from my customers, and I also have
800 number to give out, but I am proud to insist on keeping customer
service alive and well in our offices, I feel for all of you who have suffered
the wrath of the “push off” of a customer in need. I serve my customers till
the end wheather it takes 24 hours or 24 days to resolve their problem, we stay with you every step of the way. I wish I could extend myself and my services to all
of you in need. Good luck in finding your solutions.

22 NANCY September 10, 2009 at 5:59 pm

Refund Anticipation Loans, the majority of applicants do recieve them
those who do not qualify per the banks qualification are denied. and the
banks are the decision makers not the tax preparers or the IRS, yet we are here to
assist in giving you a satisfactory explanation so the customer can understand
and not leave our office in a state of confusion and anger.

23 NANCY September 10, 2009 at 6:00 pm

SORRY FOR THE DUBLICATE COMMENT
I HAVE THE WRONG WEB SITE THERE

24 tiffany January 11, 2010 at 10:09 pm

hi i would like to know when filing for ral loan is hsbc and ssbt and chase together basically what i am asking when appling for a ral through hsbc is the same as appling through chase bank?

25 Susan January 18, 2010 at 11:56 pm

My husband and I fell behind with a unsecured personal loan that we have with hsbc. We just filed our taxs at hr block tonight and after we were home, I was reading all the fine print, and I noticed that the RAL that we applied for was issued by hsbc. I realize that they probably wont approve our RAL, although I won’t know for certain for a day or two, because thats how long it is supposed to take to get our money. I am worried now though, can hsbc take my tax refund to pay off this owed debt to them?

26 Lisa January 19, 2010 at 9:43 am

No they can’t take your refund for that outstanding debt with HSBC however they will more than likely deny the RAL. It will come up denied with a debt indicator on it. That office should call you today letting you know if it was denied or at least our office does that. If they don’t then I’d call them and ask about it. It normally only takes 1 day after the IRS accepts your return to release your money but they have up to 2 days. If you don’t receive your money today whether you are getting a check printed at the office or on the Emerald card, then I would call the office and ask about it. But they should call you if it’s been denied. If it’s been denied it will automatically roll into the 8-15 days before you receive it. That’s business days too. Also since you applied for a RAL you won’t be charge the finance charge to recieve it that quickly. The only fees coming out are your tax prep fees and a $29.95 refund accout fee. And just a head’s up it usually takes the full 15 business days to receive it once it’s been denied.

If the debt is current and up to date now they may surprise you and approve it. But if you are behind on it still then I doubt it. Good Luck!

27 Kim January 22, 2010 at 1:08 pm

I would suggest everybody go to Tax act or do there own taxes It’s so simple too do them. Mostly if you have just W2′s AND 1099 G FORM (UMEMPLOYMENT W2) There are alot of companies online that you can do yourself, the IRS website provides online services where u can efile for FREE! H&R BLOCK , Jackson Hewitt, etc etc charge outrangeous fees!!! I have been doing my own taxes for about 5 yrs and will never go to any of there places again!!!! Avoid RALS like the PLAGUE!!!! the intrest is highway robbery or more like Loansharking!!! Unless you are in dire need or lights about to get cut off or other drama events Please stay away from them. It’s funny how people with good credit get denied and certain people with bad credit get approved every year . In my thought i think they go based on your refund . They mostly target low-income people that only see that kind of money only at Tax time.

28 alethia January 23, 2010 at 8:29 am

If i didnt get approved for a ral will i still have to pay chase bank all those extra fees when my refund is deposited?

29 Lisa January 23, 2010 at 12:54 pm

No Alethia the only charge you will have to pay is the $29.95 refund account fee. Because if you apply for a RAL and it is denied it turns into a RAC which takes 8-15 business days. So the only money coming out of your refund is the $29.95 and your tax prep fee.

30 Heather January 27, 2010 at 2:15 am

i used taxslayer, and i agreed to pay jp morgan chase to direct deposit my refund without paying for the taxslayer out of pocket. my federal tax return was accepted yesterday. today chase deposited one penny into my checking account. whats the deal?

31 Lisa January 27, 2010 at 9:37 am

Heather they are probably just checking to make sure the account is working. Alot of companies will do that to test it before they deposit the full amount

32 Felicia January 27, 2010 at 3:57 pm

What number can I call Chase to find out if they are going to take my refund? If I file RAL they are going to take my refund.

33 Lisa January 27, 2010 at 6:50 pm

Felicia why would they take it? And I don’t know…who is doing your taxes?

34 veronica January 29, 2010 at 12:25 am

I am a tax professional. The company that I work for is instructing us to tell people that they are being denied RALs. They are not being denied. We use Santa Barbara Bank & Trust. SBBT is not giving out RALs this year. But we are instructed not to tell the customer this.
I really need this job. I feel like I am no different than a person sticking a person up out on the street The fees are outrageous. Some people only come there because they want a rapid refund. Before letting anyone do your taxes, ask them what bank they use. If it is Santa Barbara you will not need a RAL.

35 veronica January 29, 2010 at 12:27 am

I said you will not need a RAL. I meant you will not get a RAL

36 Lisa January 29, 2010 at 9:31 am

Yep You work for Jackson Hewitt right? They have no funding to do RAL’s and yes it’s very unfair to the client to not tell them they won’t get it and let them go through that process and then get denied. And then have to pay the fees themselves. And from what I’ve heard from other people that JH’s charges for tax prep is double what H&R Block charges which is the company I worked for.

37 Karla January 31, 2010 at 8:30 am

Heather I to had that happen with taxslayer and jpmorgan, kind of a let down lol. It is testing of the account I have had several direct deposits and all were done that way it was my boyfirends return . I used liberty and was turned over to a rac for the first time in 6 years? That made e very unhappy, whats the deal with republic bank?

38 Priscilla January 31, 2010 at 1:48 pm

My husband and I filed our taxes at a local H&R Block on Friday, we were denied the IRAL, and then told that we could try for the classic RAL which we did. Well I have checked the status of my return on the HR website and it says that our return has been transmitted but is still awaiting acceptance. However when I check the HSBC website to see if the RAL was approved it says it was and a check was authorized on Saturday. Will they approve the loan before the IRS has accepted the return, why is it taking so long when HR Block told me Monday? How often are the status checkers updated?

39 Lisa January 31, 2010 at 11:30 pm

It takes up to 2 days to receive your money once the IRS accepts it. So if you filed on Friday then yes it could be Monday before you receive your money once it’s approved. Did you call the office on Saturday to ask about it? They print the checks first thing in the morning. If you don’t receive a phone call Monday morning then I would call them and ask about it.

40 Taiwana February 1, 2010 at 6:56 am

I filed my taxes at JH on Friday, I was told it would take 24 hours for my refund to be on my card. The next day I called, (NO MONEY), i called all day, still no refund. So on Sunday i called the Republic Bank, only to find out my loan was denied… I called JH and they said SORRY.. Check back in 8 to 15 days. When i check (Where’s my refund) on the IRS website, what amount am i suppose to put in for my refund? And does it really take up to 15 days to receive my refund? Would my refund come on the card or would i have to go back to JH to pick up a check?

41 Lisa February 1, 2010 at 2:05 pm

You would put the total amount of your refund at the IRS website. Well JH sucks in my book…..lol! They should have called you to tell you the loan was denied. I didn’t think they could do any rapid refund at all this year which is probably why it was denied, they just didn’t tell you that. I use to work at H&R Block and once the RAL is denied yes it takes 8-15 business days to receive your money and it’s normally 15. They will still deposit your money on your card.

42 Jennifer February 2, 2010 at 3:29 am

I used HR Block to file taxes and I was approved for (I think) a classic RAL… a small portion was on my emerald card before I left, the balance was deposited by the next day. I am also expecting my state refund to be deposited on my emerald card. State of MI status is this:

2009 MI-1040 Completed 1/26/2010 All or part of your refund has been offset to pay a 3rd Party debt (garnishment).
2009 MI-1040CR Completed 1/26/2010 All or part of your refund has been offset to pay a 3rd Party debt (garnishment).

I have not recieved any court papers indicating a garnishment. I do owe HSBC for old credit card debt . Oddly I was approved for the loan to begin with.

HELP – I NEED this money! LOL

Any ideas?

Thanks
JC

43 Lisa February 2, 2010 at 1:50 pm

That wouldn’t be a classic RAL….that would be in instant if you received part of your refund on it and then the rest the next day. It sounds like you will need to call them and find out why it’s been taken and for what garnishment.

44 Carla Petroski February 2, 2010 at 4:12 pm

Please read you H&R Block RAL paperwork! Whereas it may vary from state to state I bet it is the same in many states…this is how the form is worded in Ohio H&R Blocks: It explicitly states: “I understand that, by submitting an application, I may be submitting to a collection process that may result in me repaying debt, even if the entity to whom I owe such debt is prevented by law from bringing a lawsuitagainst me to collect the debt. If I have any questions concerning any debt I owe to HSBC, and/or its affiliates, H&R Block, and/or their assigns, including whether I owe any such debt and, if so, the specific amount fo such debt, I should contact HSBC at 1-888-227-4731 PRIOR to applying for a RAL or at any time thereafter. A telephone will be made available for my use if I wish to do so.”

My H&R Block tax preparer was very clear on this issue…because YES…HSBC /H&R Block could very easily swipe your refund to collect on such a debt!

45 Jennifer February 2, 2010 at 5:14 pm

I did read the paperwork – but have not had this problem in previous years (this was not the first year I applied for and received fast funds when I owed HSBC for the credit card)

It also sounds like if HSBC was interferring with the refund, they would have denied the classic RAL to begin with. Or they could have taken it from the federal side…

My state refund has been processed / completed (noted that there was the 3rd party garnishment) – however my federal refund is still in process and is expected to fund by 2/9. Is it possible that they are covering the HR block holiday loan / tax return fee / RAL loan first and that the state will show up on my card after the 9th?

I’m trying to just not stress and wait for my letter that should arrive within 2 weeks from the state to see what the garnishment was for. Then I will panic or not panic. LOL

JC

46 Carla February 2, 2010 at 10:59 pm

Hmmm… this is what is sounds like to me: (It is merely my opinion….your tax preparer would be able to guide you directly to the root cause.) Remember, there is no upside for HSBC to mess with your funds (federal or state)…in fact it is in their best interest that all goes well…after all they extended you a LOAN based on the hope that the IRS /State deposit would pay them back! Also, HSBC has no power over the IRS or State…so they really can’t with anything until the IRS/Stae release the funds.
It sounds, to me, that you did ,indeed, recv. your federal refund. Do you have your packet? Look on the first page and there should be a summary that explains the amount that you got on the Emerald Card for your Instant (same day) loan,,,and then there should be an amount for the rest of the for the Classic RAL 1-3 day loan. If you took out a December 2009 loan at H&R Block you should also see that that amount was taken out along with H&R Block tax prep fees and Loan fees prior to your recving either the Instant or Ral. If you add the Same Day + The 1-3 Day amounts together what you have is your FEDERAL REFUND less all fees. Does that look like the amount that you were expecting?
NOW ONTO THE STATE REFUND====> (In Ohio…at least, and probably in your state) there is no such thing as a State RAL. There is only a State RAC (8-15 days after the State accepts your return.) In my opinion, the State accepted your return but due to either a prior year/current issue they are either holding your refund for review or withholding money from your refund to pay for some kind of issue (Back Taxes? Child Support? Student Loans?)… You need to determine what the garnishment is for, if it is true, and if so how much. Your tax preparer should be able to give you a phone number for your state taxation department that will release that information. You may also be able to research this online…but make sure you are really at your state’s legit website. I hope this helps…

47 Carla February 2, 2010 at 11:03 pm

ps>>>my long winded post was in response to Jennifer ;-)

48 Jennifer February 3, 2010 at 12:03 am

Carla, I did get the Federal refund (partial same day, balance the next day). Minus the fees for the Holiday Loan, RAL fees, preparation fees. You have that all correct yes.

Per Fed IRS website my Federal funds are expected to be released by 2/9 (of course that means being released to HSBC) –

I am waiting for my State funds to be deposited to my Emerald Card-

State shows as processed/completed, but then proceeds to show 3rd party (garnishment). But I have not received any notification of a pending garnishment (from anybody). No student loans, back child support, or owing anything to state dept of treasury.

Do state funds go through the HSBC Deposit account, or do they get transmitted directly to the Emerald Card?

Thanks for everybody’s input! :D

JC

49 Lisa February 3, 2010 at 12:06 am

yes your tax preparer can explain your fees to you and with H&R they take out all fees out of the first disbursement of money. If you get a classic RAL and are denied that turns into the RAC which takes 8-15 business days. Essentially they are waiting for the IRS to release your money so they can give it to you. Any fees are taken from that. However if you don’t receive a refund then you will still owe your tax prep fees to H&R assuming you opted to have them withheld from your refund.

However your tax preparer can’t explain to the exact reason why your refund was kept by the IRS and/or bank. That is something you will have to either call the bank or irs and talk to them directly about. They won’t explain that to anyone except the client themselves.

It’s good to know that even though I quit my job I can still help people out. My quitting had to do with an office manager and not the actual job which I loved!

50 Lisa February 3, 2010 at 12:19 am

Jennifer if your state refund is being deposited on your emerald card then yes it will go through HSBC too. You got what is called a State RAC and it takes 8-15 business days for that to be deposited. The only options for the State refund is the RAC, direct deposit to bank account or mailing you a check. The state RAC costs $13 to process and it takes 8-15 business days. so yes HSBC could take that money if you owe them anything just as they can take your Federal refund. So it sounds like you need to call the state to find out why they are taking your refund.

51 Carla February 3, 2010 at 4:18 am

Jennifer…what Lisa says is true about how Rals/Racs essentially work. My gut feeling is that you really don’t have any debt issues with HSBC/H&R Block (based on the smooth sailing Fed)…and that the problem is with the state. Here are some things to consider going forward:
1. During the tax prep interview you should have been asked for your consent for H&R Block to discuss any questions about your tax return with the IRS or the State. Call the H&R office and see if a preparer can ascertain from the State what the problem is on their own…OR make an appointment to come into the office so you can make the call TOGETHER (some states just have to HEAR the client give consent before they will disclose any info.) You could also just wait for the letter that you said is forthcoming and take it into the H&R Office. I’m guessing the letter will dispel any myths as to whom the 3rd Party is and why they are making claim to your refund.

2. Please be patient with your tax office. This is their PEAK Season and they tend to get overwhelmed with the volume of clients they have to serve. A walk-in is probably not the way to go…make an appointment or ask if they have a district office which may better serve your needs (If the preparer AND the office manager start to blow you off, though, calmly ask for the District Manager’s phone number along with the number to Corporate Headquarters in Kansas City and that WILL get you some attention ;-)….and by all means call the DM if you need to! Remember, your H&R Block Fees cover you throughout the whole year and any advisement you require is part of your investment in the company. I would always go through my tax preparer first before dealing directly with the State or Fed head on.

3. If the state (or whover this mystery entity is) has a legit claim on your funds…then I would ask HSBC if you will still be charged the $13.00 you were to pay to have a state RAC loaded onto an Emerald Card (remember the $13.00 fee is an HSBC Bank Fee/not an H&R Block Fee). If no funds are available to load then they can’t get their $13.00…or can they? I don’t know…find out.

4. In my opinion I do not think your tax problem was brought about by tax preparer error…but you need to clarify this especially if you purchased Peace Of Mind (the extra $30.00 coverage.) The tax preparer can not be all-knowing but they must perform due diligence and reasonably prepare the tax return with a certain level of expertise as well as be in compliance. If the WAS Tax Preparer error and you purchased Peace Of Mind you may have a claim. Regardless, H&R Block should still offer you every possible assistance in helping you deal with this issue.

5. One last thing…and I don’t have to tell you this, but definately get to the bottom of this…if the garnishment is in error, then “woo-hoo”/problem solved/get back your money! But if it IS legit then my question would be: Is it all PAID with the capture of my refund? If the garnishment was, for example, $500.00 and your refund was only $300.00….then they are coming back at you again for the outstanding $200.00 balance next tax season (if you do not otherwise resolve it)…and here we go again!

6. In Ohio we have a 1-800 number that we can call to find out if any offsets are pending BEFORE we file our State taxes (The Fed IRS also has a number for this purpose). BEFORE you file next year: see if your state has one so you can foresee what may be coming…if anything. Good Luck!

52 Carla February 3, 2010 at 7:39 pm

Jennifer…FYI…I wrote you back but my comment was placed at the beginning of this topic insted of in progression…hope it helps!

53 jamie February 16, 2010 at 4:42 pm

how can i find out the status of my RAL loan? is their a number in mississippi to find out if their were any problems or if i was even approved?

54 jamie February 16, 2010 at 4:47 pm

does anyone know how to find out the status of my RAL loan or when i will get it? i am having it direct deposited on my h&rblock emrald card?

55 Carlalala February 17, 2010 at 6:20 pm

Jamie: If H&R Block did your taxes then HSBC is the Bank that will approve your RAL. H&R Block should have given you a toll free number to call to verify your status. Call this number, enter your SS# and the year of your birth and an automated answer should be forthcoming. You can also call the H&R Block office that did your taxes and ask them to look up your return status in e-file. They will be able to tell you if:
#1. Your return was accepted by the IRS
#2. If your RAL was accepted or denied.
#3. When to expect the funds on your Emerald Card
As long as the IRS accepts your return…and as long as you do not have any offsets by the IRS…and as long as you can pass the credit check…your RAL funds should come through in 3 days at the most. If your RAL is denied them you must wait 8-15 days after IRS acceptance to expect your funds (once again, that is IF you have no other offsets or credit problems.) If you must wait the 8-15 days, you pay no finance fees (because you recvd no loan): That means only your H&R tax prep fees and a $29.95 HSBC bank fee can be withheld from your federal refund.

56 Lisa February 17, 2010 at 7:52 pm

If you got it at Block you can call them and get the debt indicator #.

57 TaxNet Financial July 8, 2010 at 11:32 am

If your RAL was denied you will not be responsible for the loan fees only tax preparation and bank fees (approximately $30) but no loan interest since you were denied the loan. Taxgirl indicated “you are usually liable for the bank and loan fees” but this is not accurate . I agree with all her other comments. Bottom line unless it is an emergency situation don’t bother with RALs. File electronically with IRS and receive your refund in 8-10 days without any bank fees.

58 Kelly July 9, 2010 at 10:47 am

TaxNet, Thanks for your comments. Even if there is no interest, you can (and are often) certainly be on the hook for bank and loan fees including origination fees, credit check fees, etc. even if you are denied the loan. It’s kind of like applying for a mortgage – it’s up to the lender. I’ve seen it on multiple occasions.

59 israel August 14, 2010 at 1:38 pm

I cosigned for my married daughter when she got the house this year. Her $8000 first time buyer was denied by IRS, as I filed for my house in 2009. I do not live with her as we are a separate family. The Mtge company told us when we apply for the mtge; because my son in law credit was low, they could use mine instead his as a tool for the purchase. I need guidance on this. Whats the next step…Thank you

60 Carla August 16, 2010 at 5:49 pm

The rules are so complicated (and vast). You need to know the EXACT rule that is the cause of denial for the credit. I hate to say it…but the credit may have been allowed if your daughter/son-in-law had NOT been legally married…but take a look at IRS Notice 2009-12…maybe there is some guidance there regardless? I would approach the IRS directly and have a sit down with them to make sure you can’t recoup some credit….most big cities have a branch at their nearest Federal Building. Good Luck.

61 harry November 1, 2010 at 6:18 pm

HSBC bank refused to sponser H&R Bloocks RAL for 2011 tax year there will be no instant checks this year. Block robbs you any way.

62 dan January 28, 2012 at 1:30 am

hi i was approved yesterday (thursday and now its saterday. I am getting it deposited in my account but its not there what do i do

63 Fhernando February 29, 2012 at 2:52 pm

Need help! I am a transaction coordinator for a real estate company, my client recently recieved his tax refund via the HR BLOCK emerald Card. Apparently its HRBLOCKs BANK. Since he is purchasing a home, the Underwriter is wanting to see a bank statement where IRS/US TREASURY made the deposit to his account, the only thing that is showing up is :ADD FUNDS BATCH!! ARGH!!!! very frustrating, this does not tell ANYONE where the money is coming from, we need to prove that it came from IRS, and NO ONE AT HR AND BLOCK has any idea how to help us, please let me know if there is someone at EMERALD BANK, preferably at the corporate office that can help us ASAP!!! thank you

64 Alonda March 10, 2012 at 8:33 pm

I work as a Direct Care Provider, and I filed my Michigan 2011 Federal taxes Jan 23,2012. They claim that their was some type of error and they said they mailed me some papers Feb 1. 2012 (did not ). It’s been 46 days, and their system keep saying that my e file has been received On Jan 23, 2012 and approved. I called them Feb 8, 2012 and the IRS said call back on the 16 I called back and the said call back in a week so i called back March 1,2012, now they say call back March 16,2012, and they will try to fix the problem themselves. What is really going on? This is the first time that this has happen to me. My sister in law mailed her taxes off and it took her 2weeks to get her money back. Could someone help me? This is very frustrating and what do it mean still processing? Is their someone who I can call in Congress? because this is crazy!!!

Leave a Comment

{ 1 trackback }

Previous post:

Next post: