This Taxpayer Trap Is Back and Worse Than Ever

When you expect a refund from the IRS, time seems to slow to a crawl. No matter how badly you need your cash back, it can feel like you have to wait forever for the government to process your tax return, figure out how big your refund is, and get your money back to you. Even if you file electronically and elect to have your refund directly deposited in your bank account, the three weeks that the IRS has as its goal to get the majority of refunds back to taxpayers can still be a long time.

For taxpayers who are in a hurry, there are financial institutions that are more than willing to help you bridge that short period between when you file your tax return and when your refund comes. What many taxpayers don't understand, though, is the true cost of taking advantage of the services that these institutions provide. Despite past regulatory efforts to get rid of these taxpayer traps, refund anticipation loans are back -- and they can cost you a lot more than they're worth.

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Source Fool.com