What is a Refund Anticipation Loan (RAL) ****?
A Refund Anticipation Loan (“RAL”) is not your actual refund; it is a short-term tax loan in anticipation of YOUR income tax refund being paid by the United States Department of Treasury. With a “RAL”, instead of transmitting the entire tax refund to YOUR account, your tax preparer instructs the “IRS” to transmit YOUR refund to an Electronic Refund Deposit (ERD) Account established for YOUR benefit:
ERD Account #1: $1,057 disbursed to lender [Taxadvance] to repay principal loan and finance charge.
ERD Account #2: Total Refund Amount(s) disbursed to YOUR account less the loan payment of $1,057.
On January 4th, Alice Whelan views her online Taxnet Financial account and receives notification that her anticipated refunds from the “IRS” and State of Virginia are $6,340 and $771, respectively.
Alice has a few refund options as described in the Refund Option Disclosure Chart. Alice applies for a $1,000 Direct Deposit “RAL” and is approved on January 4th. Alice’s account is credited $1,000 on or before January 5th (funds are disbursed 12 hours after “IRS” acceptance of federal tax return or before).
Terms and Conditions of Refund Anticipation Loan
Refund Anticipation Loan "RAL", is a loan and you are entering into a loan agreement with Taxadvance a subsidiary of Taxnet Financial Inc: Your federal and/or state tax refund is secured in order to pay back the "RAL". If your tax refund is less than the amount you borrowed, you are still responsible for repaying the full amount of the "RAL". By entering into this loan agreement you are placing a security interest in your anticipated tax refund(s).
A RAL may cost substantially more than other sources of credit: Before applying for a RAL, you should consider whether a RAL is consistent with your personal needs and financial circumstances. If you are claiming the earned income credit (EITC), the costs of a RAL or any other loan product will be deducted from, and can substantially reduce, your EITC benefits. You may obtain the full EITC benefit if you choose to not apply for a RAL or any other loan product.
If you want to apply for a RAL, You must apply as an individual even if you are married and filing jointly: Only one taxpayer can apply for the RAL. It is solely your choice in determining who applies for the RAL. Only the taxpayer applying for the RAL will sign the Application Agreement/Tax Refund Anticipation Loan Disclosure and will be held liable for repayment of the RAL.
Your application for a RAL may be denied. Taxadvance a subsidiary of Taxnet Financial Inc. reserves the right to deny any RAL application: If you have outstanding unpaid taxes, delinquent child support, delinquent student loans or other federal debt your application for a RAL may be denied. Your RAL application may be denied if there are not adequate withholdings or estimated payments shown on your federal or state tax return. Your application for a RAL may be denied if there are aggressive tax positions taken and/or positions likely to subject your tax return to additional review by the federal or state taxing authority. Your application for a RAL may be denied if you have previously defaulted on a refund loan product. Taxadvance.com a subsidiary of Taxnet Financial Inc. reserves the right to deny a RAL application for any additional reason except for on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); to the fact that all or part of the applicant’s income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act.
If declined for a RAL you will be notified in writing within 21 days for the adverse decision. If you are declined for a RAL you will not incur any finance charges but you are still responsible for the tax preparation and administrative fees as described in the Tax Refund Anticipated Loan Disclosure. If approved, your RAL proceeds are disbursed within 12 hours of the IRS accepting your electronically-filed ("e-file") tax return.
You can cancel a RAL without penalty: You may rescind the RAL before the close of business of the 2nd day of business after you receive your RAL funds to avoid finance charges, by either returning the original check to the issuing Bank or providing the amount of the RAL to your tax preparer. Cancelling a RAL doesn't stop the processing of your filed tax return(s) and you are still responsible for tax preparation and administrative fees as described in the Tax Refund Anticipated Loan Disclosure.
Taxnet Financial Inc. does not guarantee whether, when or in what amount a tax refund will be issued: An Electronic Refund Deposit account is established for your benefit by Tax Products Group "TPG" with the "IRS" and state taxing authority to receive your refund(s); however, neither the IRS nor your state taxing authority guarantees that it will pay the anticipated tax refund amount, or a specific date by which a tax refund will be issued to a taxpayer, deposited into taxpayer's bank account or otherwise disbursed.
Collection: You (including your spouse if filing jointly) understand that by signing this Application/Agreement, you hereby irrevocably authorize Taxnet Financial Inc. or any of its affiliates to allocate and deduct from your tax refund(s) the amount of any outstanding debt that you owe as described in the Tax Refund Anticipated Loan Disclosure. You hereby authorize Taxnet Financial Inc. to process your federal tax refund and/or your state tax refund from the applicable state taxing authority; to allocate your tax refund(s) (and spouse's if filing jointly) and/or establish a holding account for the sole purpose of receiving your tax refund for your benefit and disbursing an electronic refund check or electronic refund deposit, less the RAL amount and any fees as described in the Tax Refund Anticipated Loan Disclosure. Prior to disbursing the balance of your deposit(s) you authorize Taxnet Financial Inc. or any of its affiliates to deduct and pay all outstanding fees and charges from your tax refund(s).
Armed Forces: Active duty Armed Forces are prohibited from applying for a traditional RAL. By applying for a military RAL, You certify one of the following to be true: I AM either a member of the Armed Forces on active duty or I AM a dependent of a member of the Armed Forces on active duty. I am aware that knowingly making a false statement on a loan application is a crime.
A. Waiver of Jury Trial and Arbitration: Arbitration is a process in which persons with a dispute: (i) waive their rights to file a lawsuit and proceed in court and to have a jury trial to resolve their disputes; and (ii) agree, instead to submit their disputes to a neutral or third party (an arbitrator) for decision. Each party to the dispute has an opportunity to present some evidence to the arbitrator. Pre-arbitration discovery may be limited. Arbitration proceedings are private and less formal than court trials. The arbitrator will issue a final and binding decision resolving the dispute, which may be enforced as a court judgment. A court rarely overturns an arbitrator's decision. In consideration of Taxnet Financial Inc. providing services, YOU ACKNOWLEDGE AND AGREE TO THE TERMS OF THIS ARBITRATION PROVISION.
B. Scope of arbitration. The words "dispute" and " disputes" are given the broadest possible meaning and include, without limitation (i) all claims, disputes, or controversies arising from or relating directly or indirectly to the signing of this arbitration provision, the validity and scope of this arbitration provision; (ii) all federal or state law claims, disputes or controversies, arising from or relating directly or indirectly to my Application, this Agreement (including this arbitration provision and the fees charged), or any prior agreement or agreements between me and Taxnet Financial Inc.
C. Waiver of jury trial and participation in class action. I acknowledge and agree that by entering into this arbitration provision: (i) I AM GIVING UP MY RIGHT TO HAVE A TRIAL BY JURY TO RESOLVE ANY DISPUTE ALLEGED AGAINST TAXNET FINANCIAL INC. AND ANY AFFILIATES OF TAXNET FINANCIAL INC. AND I AM GIVING UP MY RIGHT TO SERVE AS A REPRESENTATIVE, AS A PRIVATE ATTORNEY GENERAL, OR IN ANY OTHER REPRESENTATIVE CAPACITY, AND/OR TO PARTICIPATE AS A MEMBER OF A CLASS OF CLAIMANTS, IN ANY LAWSUIT FILED AGAINST TAXNET FINANCIAL INC. OR ANY OF ITS AFFILIATES.
D. No class arbitration. Except as provided in Paragraph G below, all disputes including any Representative Claims against Taxnet Financial Inc. or any its affiliates shall be resolved by binding arbitration only on an individual basis with me. THEREFORE, THE ARBITRATOR SHALL NOT CONDUCT CLASS ARBITRATION; THAT IS, THE ARBITRATOR SHALL NOT ALLOW ME TO SERVE AS A REPRESENTATIVE, AS A PRIVATE ATTORNEY GENERAL, OR IN ANY OTHER REPRESENTATIVE CAPACITY FOR OTHERS IN THE ARBITRATION.
E. Arbitration organizations and procedures. Any party to a dispute, including related third parties, may send the other party written notice by certified mail return receipt requested of their intent to arbitrate and setting forth the subject of the dispute along with the relief requested, even if a lawsuit has been filed. Regardless of who demands arbitration, I shall have the right to select any of the following arbitration organizations to administer the arbitration.: the American Arbitration Association (1-800-778-7879) or JAMS (1-800-352-5267). However, the parties may agree to select a local arbitrator who is an attorney, retired judge, or arbitrator registered and in good standing with an arbitration association and arbitrate pursuant to such arbitrator's rules. The party receiving notice of arbitration will respond in writing by certified mail return receipt requested within twenty (20) days. If I demand arbitration, I must inform Taxnet Financial Inc. or any of its affiliates. in my demand of the arbitration organization I have selected or whether I desire to select a local arbitration organization or my desire to select a local arbitrator. If I fail to notify Taxnet Financial Inc. or any affiliates of Taxnet Financial Inc. in writing Taxnet Financial Inc. has the right to select an arbitration organization. The parties to such dispute will be governed by the rules and procedures of such arbitration organization applicable to consumer disputes, to the extent those rules and procedures do not contradict the express terms of this arbitration provision, including the limitations on the arbitrator below. I understand that I may obtain a copy of the rules and procedures by contacting the arbitration organization listed above.
F. Payment of arbitration fees. You are responsible for your portion of arbitration fees such as filing administrative, hearing and arbitrator's fees (Arbitration Fees). The arbitration hearing may be conducted in the county of your residence, or within 30 miles from such county, or in the county in which the transaction under this Application/Agreement occurred, or in such place as shall be ordered by the arbitrator. Throughout the arbitration, each party shall bear their own attorneys' fees and expenses, such as witness and expert witness fees. The arbitrator shall apply applicable substantive law consistent with the Federal Arbitration Act, 9 U.S.C Sections 1-16 (FAA); shall apply statutes of limitation; and shall honor claims of privilege recognized at law. The arbitrator may decide, with or without a hearing, any motion that is substantially similar to procedure or evidence. If allowed by statute or applicable law, the arbitrator may award a party's reasonable attorneys' fees and expenses. If the arbitrator renders a decision or an award in my favor resolving the dispute, then Taxnet Financial Inc will reimburse me for any arbitration fees incurred. If the arbitrator doesn't render a decision or award in my favor the arbitrator may require me to reimburse Taxnet Financial Inc for all Arbitration Fees, not to exceed the amount which could have been assessed as court costs if the dispute had been resolved by a state court with jurisdiction, less any Arbitration Fees I have previously paid. At the timely request of any party, the arbitrator shall provide a written explanation for the award. The arbitrator's award may be filed with any court having jurisdiction.
G. Small claims tribunal. All parties, including related third parties, shall retain the right to seek adjudication in a small claims tribunal for disputes within the scope of such tribunal's jurisdiction. Any dispute which cannot be adjudicated within the jurisdiction of a small claims tribunal shall be resolved by binding arbitration. Any appeal of a judgment from a small claims tribunal shall be resolved by binding de novo, by a fresh review of the facts.
H. Governing law. Our agreement to arbitrate is made pursuant to the FAA, because the transaction may involve interstate commerce. If a final non-appealable judgment of a court having jurisdiction over this transaction finds, for any reason, that the FAA does not apply to this transaction, then this agreement to arbitrate shall be governed by the arbitration law of the State of Illinois.
I. Binding effect. This arbitration provision is binding upon and benefits the parties to the Application/Agreement and their respective heirs, successors and assigns. This arbitration provision continues in full force and effect, even if your obligations have been paid or discharged through bankruptcy. This arbitration provision survives any cancellation by prepayment, termination, amendment, expiration or performance of any transaction between the parties and continues in full force and effect unless the parties otherwise agree in writing. The Section 10 (Waiver of Jury Trial and Arbitration) does not apply in Maine, New York, or any other state where prohibited.
State Disclosures: If I reside in any of the states listed below, the following state specific provisions may be applicable to the product I am applying for.
California Residents: If married and filing from California, I have the right to apply for credit separately.
Colorado Residents: To file a complaint regarding a RAL, please contact the Colorado Attorney's General office @www.coloradoattorneygeneral.gov.
Indiana Residents: WARNING: A small loan is not intended to meet long-term financing needs. A small loan should be used only to meet short-term cash needs. Renewing a small loan rather than paying the debt in full will require additional finance charges. The cost of my small loan may be higher than loans offered by other lending institutions. Small loans are regulated by the State of Indiana Department of Financial Institutions.
Iowa Residents: NOTICE TO CONSUMER: 1. Do not sign the Application/Agreement before you read it. 2. You are entitled to a copy of the Application/Agreement. 3. You may prepay the unpaid balance at any time without penalty.
New York and Vermont Residents: A credit report may be requested in connection with my application for a RAL. At my request Taxadvance.com a division of Taxnet Financial Inc. will tell me whether or not a credit report was obtained and the name and address of the consumer reporting agency that furnished the report.
Nevada Residents: Nevada law requires that we provide the following contact information: Bureau of Consumer Protection, Office of the Nevada Attorney General, 555 West Washington Street, Suite 3900, Las Vegas, NV 89101, telephone number: 1-702-486-3132; email BCPINFO@ag.state.nv.us.
Ohio Residents: Ohio laws against discrimination requires that all creditors make credit equally available to all credit-worthy customers and that credit reporting agencies maintain separate credit histories on each individual upon request. The Ohio Civil Rights Commission administers compliance with this law.
Washington State Residents: I may rescind the RAL on or before the close of business on the 2nd day of business after I receive my RAL, by either returning the original check to the issuing Bank or providing the amount of the RAL in cash to my tax preparer.
Wisconsin Residents: No agreement, court order, or individual statement applying to marital property will affect a creditor's interest unless, prior to the time credit is granted, the creditor is furnished with a copy of the agreement, court order, or statement, or has actual knowledge of the adverse provision.
Privacy Notice: Federal law gives consumers the right to limit some but not all sharing. Federal law requires us to tell you how we collect, share, and protect your information: The types of personal information we collect and could share can include your social security number, payment history, transaction and credit history, or other debt and employment information. For everyday business purposes Taxnet Financial Inc. shares your information to process your transactions, maintain your account(s), respond to court orders or legal investigations.Taxnet Financial Inc. doesn't share your personal information for marketing purposes, information about your credit worthiness nor with any consumer credit bureaus. To protect your information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
Alice’s tax returns are processed and she receives her actual refund deposits (typically 10-21 days).
On January 18th the “IRS” disburses the federal refund to her Electronic Refund Deposit account:
The established ERD accounts allow Alice to repay her lender [Taxadvance] while simultaneously receiving her remaining IRS refund directly deposited to her account. IRS deposits are available for same day cash withdrawal. The maximum amount of the lender’s repayment is $1,057 [$1,000 advance plus a $57** finance charge] regardless of the IRS processing time [typically within 21 days] since the lender [Taxadvance] has agreed to a one-time fixed finance charge of $57** [APR 196.83% based on 10 days].
On January 20th the State of Virginia disburses the refund to her Electronic Refund Deposit account:
Fee paid upfront
|IRS Issued Check||5-7 weeks||None|
Fee paid upfront
|Direct Deposit||5-7 weeks||None|
Fee paid upfront
IRS Issued Check
No upfront fees
|Within 21 days||$12.00*|
No upfront fees
|Within 21 days||$12.00*|
12 hours after
IRS Acceptance of
return or before
|$57** APR 208.05%|
12 hours after
IRS Acceptance of
return or before
|$9*** APR 32.85%|
* Transaction Charge of $12.00 paid to Tax Product Group "TPG" for transmission and handling of refund.
** One-Time Finance Charge of $17.00 plus loan investigation fee of $40.00 for a total finance fee of $57.
***One-Time Finance Charge of $9.00 for active duty member or dependent of a military member.
****Refund Anticipation Loan (RAL) $1,000 only available in conjunction with an Electronic Refund Deposit (ERD).
If you are applying for a “RAL” there is no credit check because your loan advance is secured by YOUR tax refund. A “RAL” finance fee of $57** (APR 196.83% based on 10 day loan period) is deducted from the $1,057 advance upon approval for a $1,000 gross disbursement to you minus tax preparation fees†. To avoid a finance fee of $57** you can elect to e-file without a “RAL” and receive YOUR actual tax refund within 10-21 days. Please be responsible and consider all refund options prior to applying for a “RAL”.
You can file your tax return electronically without applying for a Refund Anticipation Loan (“RAL”), and obtain your refund from the Internal Revenue Service (“IRS”) to avoid finance charges. For example, If you file your tax return electronically, you can receive a refund check from the “IRS” within 4-6 weeks, or a direct deposit to your bank account within 21 days from the time you file your tax return. Electronic Refund Deposit (ERD) allows filing without paying upfront fees to your tax preparer.
† Tax preparation fees apply to all filing methods and are based solely on the complexity of preparing, administering, and filing your federal and state (if applicable) tax returns. Tax preparation fees must be fully disclosed and are not permitted to exceed $355.00 for any single tax year.
Taxnet Financial Inc. recommends that you consider all tax refund options before considering any tax loan products. If applying for a “RAL”, you are entering into a loan agreement with Taxadvance and you are placing a security interest on YOUR Federal and State tax refund.
If you are owed a federal tax refund, you can elect how to receive your refund and whether you want to apply for a loan product. Of the options available to you, some are free, while others have costs including fees if you apply, and are approved, for a loan.