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.
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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.
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.
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.
Chase Bank Ral will not loan against stimmulus rebate credit portion of this years return either.
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.
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.
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
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
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
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!
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!
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!
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?
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.
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.
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
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.
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.
(302) 327-2000 is the number for HSBC TFS Account Research 90 CHRISTIANA Rd, New Castle, DE 19720
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?
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.
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.
SORRY FOR THE DUBLICATE COMMENT
I HAVE THE WRONG WEB SITE THERE