| There's a welcome change in store for taxpayers | | | | supermarkets now have candy-free checkout lanes. |
| who use the Free eFile program run by the Internal | | | | Sometimes the signs identifying the no-candy lanes are |
| Revenue Service. | | | | easy to see and sometimes not. And you still have to |
| The IRS said the vendors that provide the Free IRS | | | | get past the lanes with the candy. |
| File service have agreed to stop pitching | | | | It's the same thing with Free File. Sure, you can get to |
| refund-anticipation loans and other products, such as | | | | the portal with no ads, but there is still some advertising |
| insurance and mortgages. Those sales pitches were | | | | on the way. |
| strongly criticized by consumer groups, which said such | | | | Yet the recent change is better than what was |
| high-price financial products should not be aimed at | | | | available before - - bolder and more aggressive |
| low- and moderate-income families. | | | | marketing for such things as high- cost tax refunds |
| This is the fifth year of the service, in which the IRS | | | | loans and franchising opportunities. |
| teams with income tax preparation online companies | | | | In a survey conducted by the IRS, 6 percent of Free |
| to allow individuals to file their returns electronically free. | | | | efiling users bought something from participating |
| People must go to the IRS Web site ( to use the | | | | providers. Of those, half said their purchases were not |
| service, which is available only to taxpayers with | | | | intended. DuMars said the IRS found that only 0.5 |
| adjusted gross income of $52,000 or less, up from | | | | percent of taxpayers using Free File last year took out |
| $50,000 last year. | | | | refund anticipation loans. |
| "Free is free, and you will not be offered anything," said | | | | Still, consumer advocates were particularly disturbed |
| Bert DuMars, director of the IRS's Electronic Tax | | | | about the marketing of refund-anticipation loans, or |
| Administration. | | | | RALs, which are short- term loans -- typically seven to |
| Well, not exactly. | | | | 14 days -- backed by borrowers' tax refunds. RALs |
| The removal of marketing from the Free eFile Tax | | | | cost about $30 to more than $125. Some tax |
| process could still use some fine-tuning. While it's true | | | | preparers also charge a separate fee, often called an |
| that all the sites now have a way for people to use | | | | "application" or "document preparation" fee, of about |
| the free service without ads, it's not 100 percent | | | | $40, according to consumer advocates at the National |
| advertising-free. For example, many of the sites | | | | Consumer Law Center and the Consumer Federation |
| advertise that they will electronically file tax return for a | | | | of America. |
| fee. And there are links for what the providers call | | | | The fees for RALs, when expressed as an interest |
| "value-added offers." | | | | rate, can range from about 40 percent to more than |
| When you go to the IRS Web site and click on the | | | | 500 percent a year. |
| efile for free link, you are taken to a list of participating | | | | Every year, the two consumer groups launch |
| companies. You then have to click on a link for a | | | | campaigns to steer people away from the loans. The |
| company you may want to use based on whether | | | | reduced advertising is a good step forward, said Jean |
| you meet its criteria. For example, some vendors will | | | | Ann Fox, director of consumer protection for the CFA. |
| file free returns only for people with an income of | | | | "A government Web site shouldn't be used to sell |
| $30,000 or less or if they live in certain states. | | | | triple-digit interest rate loans to low-income workers," |
| In some cases, you still have to read through a lot of | | | | Fox said. |
| verbiage before you're taken to the Free File sign-in | | | | Not to mention that the loans are unnecessary. If you |
| page on the vendor's Web site. If you know you | | | | file taxes return electronically and have your refund |
| qualify, go straight to "Start My Free File Return." If you | | | | deposited directly into your bank account, you get your |
| don't see that wording, read through information about | | | | money in two or three weeks. |
| whether you qualify to file free, then click a button that | | | | Also new this year: Taxpayers will be able to use Free |
| says "Start Now." | | | | File to request the Telephone Excise Tax Refund. |
| Think of it shopping in a supermarket. Checkout lines | | | | Some Free File companies will provide free access to |
| often have rows of candy and other treats. It's a great | | | | Form 1040 EZ -T for those people who aren't required |
| marketing ploy because the wait gives your kids plenty | | | | to file tax returns but who are eligible for the one- time |
| of time to get on your last nerve begging for candy. | | | | telephone excise tax refund. |
| The begging caused parents to complain. Many | | | | |