Abstract
The IRS has an uneasy relationship with tax return preparers. Preparers may ease the tax filing process and improve take-up of benefits like the earned income tax credit (EITC); however, preparers also profit from financial products sold in connection with tax preparation that have been viewed as exploitative. But can we have a market for low-income tax preparation without such products, and should we? I estimate the effects of regulation curtailing the market for refund anticipation loans (RALs) on a variety of outcomes, including demand for paid tax preparation, EITC take-up, and demand for other financial products, to explore the source of RAL demand and the relationship between RALs and tax compliance. Nearly eliminating RALs reduced demand for paid tax preparation and EITC take-up, and increased demand for an alternative product, which suggests that lack of access to the payment system may be an important driver of RAL demand and that even present-biased individuals may benefit from RALs.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
