Are Tax Bank Products the Right Fit for You and Your Clients?

Did you know that, according to the FDIC, over
six percent of American households did not have or use a bank? And that nearly
nineteen percent more are considered “underbanked?” (Underbanked people
have a checking or savings account but also use financial products and services
from outside the banking system, like prepaid cards and check cashing

The problem of bank access is real. Not everyone
has access to an affordable, safe, and secure banking service. What does that
mean to you and your clients at tax time?

You may want to consider using tax-related bank
products to help your clients access their income tax refunds faster and more

What Is a Tax Bank Product?

Tax bank products are software solutions that
facilitate fee payments without requiring your client to have an account. These
are financial products created specifically to receive tax preparation and
refund services. Most of these products offer refunds in a variety of ways,
including electronic refund checks, electronic refund deposits, and prepaid
debit cards. 

These products allow clients to use your
services without paying your fee upfront. Instead, your tax prep fees are
deducted from the client’s refund. The money is routed from the IRS to
something called a “Refund Settlement Bank,” which is another name for tax
bank.  Several are available. Check with the software vendor to learn
which banks it offers. 

How Can You Offer a Tax Bank Product?

In order to provide tax bank products to your
clients, you must first apply to become an authorized e-file provider. Becoming
an approved e-file provider is just part of doing Company these days, and you
may already be one.

Next, you select the bank you want to deal with.
Then set up the software and go!

The Benefits of Offering a Tax-Refund Bank

Offering tax bank services benefits both you and
your clients.

Your clients get tax preparation services
without any out-of-pocket payment to you. It’s easier for them to come to you
to have their taxes prepared if they don’t owe payment upfront. Other benefits

  • Fast tax refund receipt via e-filing and refund transfer.
  • Options for receiving the refund: as a check, debit card, or direct deposit.
  • Access to loans based on the expected refund.

What do you get out of the deal?

  • You receive payment for your services quickly. No
    endless invoicing, emailing, or phone calls chasing payment.
  • You can out-compete other tax preparation services that
    don’t offer tax bank services.
  • You attract clients who can’t or don’t want to pay for
    your services upfront.
  • It’s easy to do.

Expand your services by offering a tax-refund
related banking service through your Company. Grow your client base by
offering easy access to tax preparation services, as well as, cash advances and
small loans that cost less than from the local loan shark.

Be a hero to the unbanked and underbanked.
Nobody should forfeit their tax refund because they can’t afford tax prep
services or a way to receive their refund safely. Offer tax bank services this
tax season and watch your bottom line and community popularity grow.

This blog was written by Jayson Mullin, a partner at Top Tax Defenders, a tax resolution company with over 30 years of experience working with the IRS to aggressively help clients with any type of tax relief problems.


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