As the IRS delays the funding of returns again this year for millions of American taxpayers, the option of receiving a cash advance on a refund is very attractive. Most of the major players in the tax preparation industry are offering this product including, H&R Block and Jackson Hewitt. Independent tax professionals will want to be able to compete and have their own cash advance available to taxpayers. Fortunately it is quite simple to offer this option and requires tax pros to sign up with an IRS approved refund transfer provider such as TPG, Refund Advantage, EPS, Republic Bank or Refundo.
The refund transfer provider will advance the taxpayer anywhere from $500 to $2,500 depending on their underwriting guidelines. Ian Gardner from Refund Kingdom notes an important distinction, “These advances are not based on the taxpayer’s credit but on the information submitted in the tax return”. The advance will be given to the taxpayer on debit card or a check. Once the tax refund is funded the IRS transmits the refund to the refund transfer provider who will then pass on the balance of the refund minus the advance to the taxpayer. In the event that the IRS does not fund the refund there is no recourse to the tax professional or the taxpayer.
Many tax professionals already use refund transfer providers as a way to collect their preparation fees directly from the taxpayer’s refund. There are many advantages to working with refund transfer providers including pre-season loans for tax professionals, in-season advances on preparation fees and a variety of disbursement options for taxpayers.
Refund Kingdom provides a full range of essential services for tax pros. This includes industry leading software solutions as well as technical support, tax preparation support and client retention strategies. Sigma Tax Pro specializes in helping tax preparation firms expand their businesses, open new offices and increase their client base.