WASHINGTON, D.C. - Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) and Xavier Becerra (D-CA), Subcommittee Member and Vice Chair of the Democratic Caucus, today issued the following statements in support of the Internal Revenue Service’s (IRS) decision to no longer provide tax preparers and associated financial institutions with the “debt indicator," which is used to facilitate the issuance of refund anticipation loans (RALs) secured by a taxpayer’s anticipated refund. The House of Representatives, led by Chairman Lewis and Democrats on the Ways and Means Committee, has twice passed legislation to remove the debt indicator. The IRS announced it would remove the debt indicator starting with the 2011 tax return filing season.
"I am pleased that the IRS has ended the debt indicator program for lenders and preparers," said Oversight Subcommittee Chairman John Lewis. “I have been concerned for years that the debt indicator facilitates the availability of refund anticipation loans by limiting the risk to lenders. These high-cost loans target low-income families and those eligible for the earned income tax credit who need money quickly. Given the speed at which federal tax refunds are now delivered, this decision is a win for taxpayers who will no longer spend millions of dollars for a 10-day loan."
“For too long, working families have been targeted by predatory lenders with refund anticipation loans. As a member of the House Ways and Means Committee I have encouraged the IRS to adopt common sense practices to protect modest Americans when it comes time to file their taxes," Rep. Becerra said. “I commend Commissioner Shulman for taking this important step to reduce the market for usurious refund anticipation loans."
