The Government Accountability Office conducted an undercover investigation of tax preparers earlier this year to learn what they disclose to clients about the fees they charge for refund anticipation loans.

GAO investigators used Internet searches to identify 22 different tax preparers across the country and called them to ask about RALs. Posing as taxpayers, they also visited 18 tax preparers in the Washington, D.C., and Baltimore area, taking photographs of their offices.

The businesses included immigrant assistance centers, seasonal tax preparers operating out of trailers, auto dealers and rent-to-own stores that offered to apply the tax refund toward purchases, and even shoe stores. The report includes photos of several of the businesses. A photo of the shoe store shows a sign in its window offering "free shoes with processed tax return."

Investigators had several tax returns prepared, but not filed, by five of the businesses. Investigators used fictitious names, cover stories and income information.

The GAO found that the tax preparers it visited were generally willing to provide information about RALs, but did not use a consistent method to calculate their advertised lending rates.

"All five preparers that completed federal and state tax returns for our fictitious individuals gave an estimate of the fees and finance charges associated with a RAL, and most calculated the refund amount available after deducting fees," said the report. "However, we found that tax preparers did not use a consistent method to calculate the [annual percentage rates] in their advertisements and at least one preparer did not calculate its advertised APR according to Truth in Lending Act requirements."

For example, the annual percentage rate on a $1,000 RAL from one tax preparer was represented in advertisements as 36 percent. However, when a $30 account fee is included in the APR calculation in accordance with the act, the APR is actually 135 percent. The preparer included the fee in an advertisement showing the various fees and finance charges associated with a RAL, but noted in small print that the account fee was not actually included in the calculated APR shown in the ad.

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