Fruad will go down? I hate to inform you that the largest fraud is EIC Fraud and while their are tax preparers who commit fraud it is nothing compared to the fraud committed by the American Public. EIC is abused everywhere and a good percentage of the little people think they deserve it no matter if they qualify or not. This will not cut down on fraud at all. Other actions being taken by the IRS may cut down on fraud but taking away the debt indicator will not do anything about fraud.
As far as this helping anyone out I do not think you understand what is going to happen. For one the banks will offer a Ral Product but this product will be much more expensive and the banks will be forced to utilize other underwriting criteria which will make the product much more expensive and those who have always gotten RALS will still attempt to while the others will go with ERC. Over the past 4 years the amount of people applying for Rals has reduced and spiked last year only because of the pressure put on the banks to not charge as much interest. A ton of my clients chose the Ral that normaly would not of because the cost between the ERC and the Ral was very minimal and if they were not approved it did not matter to them. Rals or no Rals I am confident in continuing my expansions.
This will not decrease the consumers cost at all but will force prices to increase overall as is the case every time regulations start entering into an industry. This will force many of the independent shops to fold but overall I think is just a bump in the road for the industry. When this is all said and done we will have less preparers and the ones who survive will be stronger than ever. JTX is on the way out and Block and Liberty will not shrink they will grow, the small independents will shrink.
This year will be another year like last year because of the huge amount of people unemployed and that will not get much better until they stop extending Unemployment Benefits. There are excessive amount of people on unemployment who could go get a job but refuse because they feel its their right to take unemployment benefits until they run out, talk about fraud. The economy is improving and jobs are returning, but until the benefits are allowed to run out the numbers will remain artificially high. I have spoke to 10 plus people this week who flat out stated that they will not go back to work unless they find a job that pays considerably more until the benefits are about to expire, many take there UE check and have picked up side jobs for cash to supplement and have no desire to go back until forced. But by the following year after the benefits run out the amount of filers going to paid preparers will level back out and then everyone will realize all the hysteria was for nothing.
The fraud that will go down will be the fake tax returns that use ss# gotten from homeless and witless.
As for EIC..well thats welfare for most people. Take away EIC and you get crime in the inner cities like the 70's.
The tax laws are unfair..yada yada yada If a taxpayer plays the lottery or horses and gets a W2G (even though he loses it back)..it will take away some or all of his EIC,but if hes a stock gambler.he's allowed to net it out on Sch D and keep all the EIC.
THATS not fraud by IRS? Same thing for refunds denied due to 3 year rule. Why is Charity a deduction? to be subsidized by taxpayers? etc etc