02-08-2014 08:45 AM
Paid for a RAC. IRS has accepted and approved refund. I have been given a DDD of 2/10. If this is an anticipaction check, why havent I recieved the funds on Emerald Card? If I don't get it until after the IRS distributes the funds, it's not really an anticipaction check and I should be refunded the $35 I paid for this "service".
Solved! Go to Solution.
02-08-2014 02:47 PM
The reason you don't receive your federal tax refund (less fees withheld) prior to the IRS releasing it is because that would constitute a loan. A few years ago, the federal office of the comptroller halted the issuing of loans (known as RAL or refund anticipation loan) secured by anticipated tax refunds. The main purpose of a RAC is to allow H&R Block customers to utilize tax preparation and filing services without having to pay out-of-pocket for the fees.
Also, a tax refund remains to be "anticipated" until you receive it. That is why the Refund Anticipation Check has retained it's original name since first offered during the 1980's.
I hope this helps explain a little more about RAC. Have a great weekend.
Tax Professional (Retired)