IRS takes actions to reduce tax refund loans

August 5, 2010 5:26:16 PM PDT
The California attorney general and consumer groups have warned people not to take out expensive tax refund loans because they are very costly.

Oftentimes, tax preparers will offer to loan their clients the amount they expect to receive as a tax refund.

That means clients get their money quicker, but at a big cost -- up to 500 percent interest in some cases.

Now the IRS is taking action to reduce these loans.

The IRS will no longer release data about the back taxes you owe or other debts.

That makes it harder for tax preparers to predict your refund and more risky to offer a loan.