IRS Issues Prepaid Debit Cards for Taxpayers

With tax season coming to an end in the next few weeks, taxpayers and the Treasury Department alike will be waiting to see the results of a pilot program for issuing refunds on prepaid debit cards. The program was rolled out to a limited pool of taxpayers this January.

The program, which was introduced to 600,000 households, was intended to offer taxpayers an alternative to the controversial "refund anticipation loans." Since many low-income taxpayers don't have access to banks to cash tax-refund checks, a number of retail tax preparers issued prepaid debit cards to their customers loaded with the refund amount, minus fees and interest. And there's the problem. The IRS has been looking at ways to effectively put an end to the loans, but has also recognized that there are few other options for many taxpayers.