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City of Seattle
Ed Murray, Mayor

SUBJECT: Know the facts before you sign for a tax-refund loan

1/28/2005  12:00:00 PM
Cyndi Wilder  (206) 684-0909
Julie Moore  (206) 684-0909
Roberto Bonaccorso  (206) 684-5282

Know the facts before you sign for a tax-refund loan
New Seattle law requires businesses to disclose fees to customers

Are you planning to get a loan based on your estimated income tax refund? As of January 2005, any business in Seattle that offers these loans must tell you what the loan will cost and how much you will receive in cash. Tax refund anticipation loans often carry high interest rates and other fees. Such loans may not be necessary because people usually can receive their IRS refunds in three weeks or less.

The new law also requires tax preparation businesses to tell you that:

  • The Internal Revenue Service (IRS) will mail your refund to you at no cost just three weeks after you file your return (two weeks through direct deposit to a bank account);
  • You do not have to agree to a refund anticipation loan in order to get tax help;
  • You must repay any loan you receive even if the IRS denies, delays or reduces your actual income tax refund;
  • If you have no bank account, you can open one to get a refund anticipation check.

The message behind Seattle’s law is simple: KNOW BEFORE YOU SIGN. If a business fails to give you this required information in English or in Spanish, you should contact the City of Seattle immediately by calling the Department of Executive Administration's Revenue and Consumer Affairs Division at 206-233-0067 (TTY 615-0476), or e-mail

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Seattle Office for Civil Rights

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