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• The way tax refund loans actually work is a tax preparer or a lender will actually assume the risk of receiving the money back from the IRS and loan the taxpayer the money out of their own funds. When and if the IRS refunds the full expected amount of money the taxpayer claims to have overpaid, the tax preparer or lender will reimburse themselves with the money that the IRS refunds on the tax return. It is my opinion that Tax refund anticipation loans have actually been inappropriately labeled by some as predatory lending by a few people who are ignorant and unfamiliar with the risks and costs involved with making these types of Tax Refund Loans.

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