Thread: Treasury Department "Debit" cards for IRS Refunds

Treasury Department launches program to deliver some tax refunds on debit card
January 13, 2011

The federal government wants to say goodbye to the paper tax-refund check, and Thursday launched a pilot program to let some people receive their money on a debit card.

Next week, the Treasury Department will send letters to 600,000 low- and moderate-income taxpayers offering them the option of signing up for a special MyAccountCard Visa pre-paid debit card. There are two goals: save the government the expense of mailing paper checks while providing taxpayers without bank accounts quicker access to their refunds.

In 2010, the Treasury Department said it spent $40 million to mail approximately 45 million paper tax-refund checks, money that could have been saved if the payments were made electronically. About 63% of taxpayers got their refunds electronically last year, which the department said allows for faster access to the money. Also, paper checks are sometimes lost or stolen, and people without bank accounts often must pay fees to cash them through private check-cashing services.

The Treasury Department is also touting extra benefits of the prepaid Visa cards, which are being offered through Bonneville Bank. [Updated at 8:30 a.m.: The program manager for the cards is Green Dot Corp. of Monrovia, the largest player in the prepaid debit card industry.]

People can use the cards to receive their work paychecks through direct deposit, pay bills online and withdraw money without service fees from about 15,000 ATMs nationwide.

"This innovative card can be used for everyday financial transactions, such as receiving wages by direct deposit, withdrawing cash, making purchases, paying bills and building savings safely and conveniently, giving users more control over their financial futures," said Deputy Treasury Secretary Neal Wolin.

At this point, the only way to get a card is if you are mailed a letter from the Treasury Department offering it; the letter will include a special registration number. As part of the pilot program, people who receive the letters will be randomly offered cards with different features and fee structures to determine what would be the best options when the program is expanded. Some of the cards, for example, will have a $4.95 monthly fee.

The Treasury Department is also launching another pilot program to encourage thousands of people who are paid through electronic payroll cards to have their tax refunds loaded onto those cards. The department said it would work with payroll provider ADP on the program.

http://latimesblogs.latimes.com/mone...-irs-visa.html

Charging people too poor to keep bank accounts extra fees to access their tax refunds isn't right.

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First they take my money and hold it for a year - pay no interest on my earnings they they hold - but now they want to charge a fee to access my own money - all they while the goverment is earning the interest on my earnings. ????

How much do Check Cashing Stores charge to cash a IRS check?

Walmart and Target do it for free because they figure if you cash it there you will spend a portion of it there...

Originally Posted by Jolie Rouge

Walmart and Target do it for free because they figure if you cash it there you will spend a portion of it there...

Yeah, I remember when we all got those stimulus checks places like Kroger were giving you 10% back when you turned your check into a Kroger Gift Card.

Still, I think that alot of people who don't have checking accounts take their IRS checks down to the local check cashing store & pay 3-5% to get their check cashed.

I would think that most people wouldn't like it because its just another way for Big Brother to keep an eye on you & your purchases. (Conspiracey Theory Joke.. Don't take seriously.. although some people really do think that way....)

In 2010, the Treasury Department said it spent $40 million to mail approximately 45 million paper tax-refund checks, money that could have been saved if the payments were made electronically.

Did I read that correctly? It costs them 40 million to cut and mail 45 million checks. Somebody is already getting screwed and I think it is the taxpayers.

Originally Posted by dv8grl

I would think that most people wouldn't like it because its just another way for Big Brother to keep an eye on you & your purchases. (Conspiracey Theory Joke.. Don't take seriously.. although some people really do think that way....)

Mark me a conspiracy theorist. I don't like having too much of my personal items, information and funds linked together. Not just for the governmental issues but also for the criminal issue and just plain ol' mistakes and inconveniences.

Does anyone recall when I mentioned sometime ago that my BFF's wallet/handbag was stolen? The thief not only used all her credit cards, checks (she had the Driver's ID), etc.....but just recently my BFF told me she had to go to court because there was a judgment against her and all her bank accounts had gotten frozen. Why? Because the thief used her expired pet insurance, the vet, once the claim was bounced back, then went to court and got a judgment without her knowledge and froze her bank accounts. Checks for everything bounced all over and there were a ton of fees and many head and heartaches. This happened, perhaps a year or more after her bag was stolen. Apparently, in court, you do not have to be personally served. If the documents are mailed to your "home" address on more than 3 occasions (I could be incorrect with the exact particulars but it is along those lines), they consider that "served and notified". Well, my BFF had just moved so she never had gotten any of the notices and now it is too late. *There's also more fallout than this.*

So no, I'm not keen on putting all my eggs in one basket, linked by a card.

It may be a nice option for those who want it, but often they start a program like this as optional and then ram it down for everyone whether they like it or not.

It may work out for some, but I wouldn't want it. Send me a check and I'll deposit it the account of my choice.

Originally Posted by cabby92

40 million for 45 million checks is less than $1 per check. Not an unusual amount at all.

The debit cards aren't a bad idea at all. A lot of those low income taxpayers without bank accounts get really large refunds. They should take their 8,000 check to WalMart and walk around with that kind of money? That's a bad idea on many fronts.

Are you saying a low income tax payer gets back $8,000 ? That's a pretty good refund for "low income". I would figure their refunds to be a few hundred dollars. For $8,000 I'd open a bank account.

Agree $1 per check not unusual considering postage, check material, overhead and labor.