Tax refund program painfully boosts H&R Block profits

Journal Record, The (Oklahoma City), Apr 4, 2002 by Michael Liedtke Associated Press

The difference between getting an advance through Block and waiting for the government to issue an electronic refund is about 10 days. Based on that gap, the $76.19 fee translates into an annualized interest rate of nearly 140 percent on a $2,000 loan, which is close to the average refund returned to taxpayers through March 8, according to the IRS.

At that interest rate, cash-strapped taxpayers are better off drawing a cash advance from a bank credit card and repaying the money when the full refund arrives from the IRS, said Chi Chi Wu, a staff attorney for the National Consumer Law Center, which studies issues affecting low-income households.