U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

21–431 PDF 2005

S. Hrg. 109–81

TAX RELATED FINANCIAL PRODUCTS

CAN BE COSTLY

HEARING

BEFORE THE

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

APRIL 15, 2005

FIELD HEARING IN ST. PAUL, MINNESOTA

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Chief Counsel 

AMY B. NEWHOUSE, Chief Clerk 

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS 

NORM COLEMAN, Minnesota, Chairman 

TED STEVENS, Alaska 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

RAYMOND V. SHEPHERD, III, Staff Director and Chief Counsel 

C. JAY JENNINGS, Investigator 

ELISE J. BEAN, Minority Staff Director and Chief Counsel 

MARY D. ROBERTSON, Chief Clerk 

(III)

C O N T E N T S 

Opening statement: Page 

Senator Coleman .............................................................................................. 1

WITNESSES 

FRIDAY, APRIL 15, 2005

Pat Eckelberry, Former H&R Block Tax Preparer, Wayzata, Minnesota ........... 4

Nila Grant, Former Jackson Hewitt Tax Preparer, New Hope, Minnesota ....... 6

Julie Burbach, H&R Block Client, St. Paul, Minnesota ....................................... 8

Beth Haney, Ph.D., Research and Outreach Director, Children’s Defense 

Fund, St. Paul, Minnesota ................................................................................... 14

Bonnie Esposito, Executive Director, AccountAbility Minnesota, St. Paul, Minnesota .................................................................................................................... 16

Gary P. Weinstein, Vice President, Legal and Government Affairs, Jackson 

Hewitt Tax Services, Inc., Parsippany, New Jersey .......................................... 24

Robert A. Weinberger, Vice President, Government Relations, H&R Block, 

Kansas City, Kansas ............................................................................................ 27

ALPHABETICAL LIST OF WITNESSES

Burbach, Julie: 

Testimony .......................................................................................................... 8

Prepared statement .......................................................................................... 42

Eckelberry, Pat: 

Testimony .......................................................................................................... 4

Prepared statement .......................................................................................... 37

Esposito, Bonnie: 

Testimony .......................................................................................................... 16

Prepared statement with an attachment ....................................................... 57

Grant, Nila: 

Testimony .......................................................................................................... 6

Prepared statement .......................................................................................... 40

Haney, Beth, Ph.D.: 

Testimony .......................................................................................................... 14

Prepared statement with attachments ........................................................... 44

Weinberger, Robert A.: 

Testimony .......................................................................................................... 27

Prepared statement with an attachment ....................................................... 161

Weinstein, Gary P.: 

Testimony .......................................................................................................... 24

Prepared statement with attachments ........................................................... 141

EXHIBITS 

1. Refund Anticipation Loan Process, chart prepared by the Permanent Subcommittee on Investigations ............................................................................ 168

2. Voluntary Income Tax Assistance (VITA) Sites in Minnesota, chart prepared by the Permanent Subcommittee on Investigations ........................... 169

3. IRS Tax Assistance Centers in Minnesota, chart prepared by the Permanent Subcommittee on Investigations ............................................................. 170

4. Printout of IRS.gov Internet website, regarding Free File Home—Your 

Link to Free Online Filing ............................................................................... 171

Page

IV

5. H&R Block Quality Interview—Value-Added Closing sheet received from 

Pat Eckelberry, former H&R Block Tax Preparer ......................................... 172

6. H&R Block Intra-Company Correspondence, received by Pat Eckelberry, 

former H&R Block Tax Preparer regarding Peace of Mind guarantee ......... 173

7. Statement for the Record of Maerine Henderson ............................................ 174

8. Statement for the Record of Richard Turner, RAL Program Director, 

Santa Barbara Bank of Trust .......................................................................... 176

9. Statement for the Record of HSBC Taxpayer Financial Services ................. 179

10. Statement for the Record of ACORN Financial Justice Center, St. Paul, 

MN ..................................................................................................................... 189

11. Correspondence from Jackson Hewitt to the Permanent Subcommittee on 

Investigations regarding percentage of Jackson Hewitt customers who receive an Earned Income Tax Credit in Minnesota and who also obtained 

a refund anticipation loan ................................................................................ 191

12. Correspondence from H&R Block to the Permanent Subcommittee on Investigations regarding questions for the record .............................................. 192

(1)

TAX RELATED FINANCIAL PRODUCTS 

CAN BE COSTLY 

FRIDAY, APRIL 15, 2005

U.S. SENATE, PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 1:02 p.m., in The 

Reading Room of the James J. Hill Reference Library, 80 West 

Fourth Street, St. Paul, Minnesota, Hon. Norm Coleman, Chairman of the Subcommittee, presiding. 

Present: Senator Coleman. 

Staff Present: Jay Jennings, Investigator. 

OPENING STATEMENT OF CHAIRMAN COLEMAN 

Senator COLEMAN. This hearing of the Permanent Subcommittee 

on Investigations is called to order. 

Good afternoon and thank you for attending today’s hearing. As 

Chairman of the Permanent Subcommittee on Investigations, I 

have investigated and conducted hearings on a wide variety of subjects related to fraud, waste and abuse, including consumer abuses 

in the credit counseling industry, Department of Defense contractors who owed over $3 billion in unpaid taxes, the safety and availability of imported prescription drugs, the abuse of tax shelters to 

evade paying billions of dollars in Federal taxes, and the Oil-forFood program in which Saddam Hussein diverted billions of dollars 

to reward his friends, bribe U.N. member states, and rebuild his 

military. As your Senator, my primary responsibility is to represent 

the interests of the people of Minnesota. 

I have heard and read about Minnesotans’ concerns related to 

the financial products that are offered by tax preparers, and particularly Refund Anticipation Loans, or RALs, as they are known. 

It is a pleasure to conduct this hearing in Minnesota so that I can 

determine whether there are abusive practices in the marketing of 

these products, what options exist to mitigate their high costs, and 

to ensure that there are appropriate checks and balances to promote fairness and integrity in the tax preparation industry. 

In addition to RALs, the other bank products include refund anticipation checks, refund transfers, debit cards, loans to pay taxes 

that are due, and in one case, advance loans that are offered in November and December for holiday needs. 

RALs are loans provided by banks, and I want to stress that. 

Loans provided by banks through tax preparers that are secured by 

2

1See Exhibit No. 1, which appears in the Appendix on page 168. 

the taxpayer’s anticipated refund. These loans are considered high 

risk and carry an extraordinarily high annual percentage rate 

ranging from 28 to 424 percent. RALs may be offered as a sameday advance loan or as a payment that is made to the taxpayer 

within 2 days of filing their tax return. RALs are the fastest and 

most costly method of obtaining a refund in the form of a loan, and 

they may be appropriate for some taxpayers who are in extreme financial distress, lack a bank account, or cannot afford to pay their 

tax preparation fees. 

On the other hand, there were over 12 million tax-related financial products sold in 2003, of which almost 9 million were RALs. 

It is not clear whether the popularity of RALs is due to financial 

distress, taxpayer impatience, or aggressive marketing tactics. 

In addition to being costly to consumers, my investigation has determined that these products are highly profitable, generating over 

$200 million in revenue in 2004 for H&R Block and Jackson Hewitt, the two largest tax preparers in the country. 

Let me briefly review the RAL process. Take a look at Exhibit 

1,1 which is on my right and your left. When a taxpayer is due a 

refund and wants a RAL, the taxpayer authorizes IRS to send their 

refund to the bank that is making the loan. IRS sends the taxpayer’s refund to the bank. The bank deducts the tax preparation 

charges and the application fee, and sends that money to the tax 

preparer. The bank further deducts a bank account setup fee, the 

finance charge, and any outstanding balance due from a prior RAL. 

Whatever remains is provided to the taxpayer. 

To promote the sale of their products, the banks also pay tax preparers like H&R Block and Jackson Hewitt refunds, incentives, and 

rebates. 

I am concerned that these promotional activities in certain circumstances could conflict with tax preparers’ ethical obligations to 

place their clients’ interest first. This could result in selling highcost products to clients when there are less costly alternatives 

available. The trust relationship that exists between a taxpayer 

and a tax preparer should be no less sacrosanct than the trust relationship that exists between an attorney and client, or a doctor and 

patient. Consider that your tax preparer probably knows more 

about your personal life than your best friend. We cannot allow 

this kind of trust relationship to be betrayed by the tax preparer 

or the company for a financial gain that occurs at the expense of 

their client. And I plan to make sure that there are adequate 

checks and balances to ensure that if this occurs, there will be adverse consequences. 

There are less costly alternatives to a RAL, but they do not have 

the instant gratification that is often promised by a RAL. These alternatives include lower cost financial products and free tax preparation for lower income and elderly individuals. For example, a refund anticipation check, or RAC, is a bank product that costs less 

than a RAL because it is not a loan and therefore does not have 

a finance charge. RACs have account set-up and application fees, 

but can be used to defer the tax preparation fee and requires a 

wait of about 8 to 15 days. 

3

1See Exhibit No. 2, which appears in the Appendix on page 169. 

2See Exhibit No. 3, which appears in the Appendix on page 170. 

3See Exhibit No. 4, which appears in the Appendix on page 171. 

Most clients are not thoroughly familiar with the variety of options offered by tax preparers. Where a tax preparer offers to serve 

their clients’ best interests by finding every legitimate deduction 

and credit and minimizing the taxes that their clients pay, I believe they should have no less of an obligation to recommend the 

refund method that best suits their clients’ needs. 

Another alternative to the high cost of a RAL is free tax preparation. In Minnesota, a taxpayer has three options: The Volunteer Income Tax Assistance, or VITA program, has 273 sites located 

throughout Minnesota that are staffed by volunteers who can prepare and e-file a tax return.1 In 2004, Minnesota’s VITA sites prepared and filed 41,018 tax returns. The Internal Revenue Service 

operates tax assistance centers in Bloomington, Duluth, Mankato, 

Minneapolis, Rochester, St. Cloud, and St. Paul.2 IRS will complete 

and file a taxpayer’s return at these centers. In 2004, these tax assistance centers prepared and filed 2,425 tax returns, of which 159 

were EITC, Earned Income Tax Credit, returns. 

This past week, IRS announced that it plans to close 105 of its 

367 tax assistance centers nationwide, and I will discuss this with 

Commissioner Mark Everson to ensure that the IRS continues to 

provide assistance to Minnesota’s taxpayers. I plan to meet with 

the commissioner next week to have this discussion. 

IRS also offers free filing to anyone with access to their World 

Wide Web site at irs.gov.3 In 2004, 3.5 million taxpayers filed their 

returns by using the IRS web site. While all of these options are 

free, it will take 8 to 15 days to receive your refund if it is directly 

deposited in your bank account. Other options may take longer, but 

clearly this is a situation where patience pays dividends. 

Today we will hear testimony from tax preparers for H&R Block 

and Jackson Hewitt. They will share with us their tax preparation 

experiences. I’m also hoping to have the presence of former clients. 

We’re still waiting for one to appear. 

We will also hear from consumer advocates based in Minnesota 

who will testify about free tax preparation and their outreach efforts to ensure that all Minnesotans who are eligible for the Earned 

Income Tax Credit file for and receive it. They will also describe 

the impact of RALs on low-income individuals. 

And, finally, we will hear from H&R Block and Jackson Hewitt, 

the two largest tax preparation services in the Nation, who will testify about the products they offer, their cost, their marketing, disclosure policies and practices, and their efforts to serve their clients’ best interests. 

As I indicated, on Thursday of next week I’ll be meeting with the 

IRS Commissioner, Mark Everson, to discuss what I learn here 

today. I look forward to today’s testimony and I want to thank all 

of the witnesses who have come here for their cooperation with the 

Subcommittee in putting together today’s hearing. 

Let me briefly reiterate that what we’re talking about here is a 

situation where many of those who have the greatest financial 

need, who have great financial stresses are faced with a situation 

where they know they’re going to get a refund, and they want it 

4

1The prepared statement of Mr. Eckelberry appears in the Appendix on page 37. 

very quick, but there is an extraordinary cost for that. And I hope 

out of today’s hearing at least that message goes out so people are 

in a position to make informed choices, and not to feel pressured 

or confused into making choices which in the end may not or are 

not in their best interest. 

I would like to welcome our first panel of witnesses for today’s 

hearing. The first panel includes Pat Eckelberry, a former H&R 

Block tax preparer from Wayzata, Minnesota; Nila Grant, a former 

Jackson Hewitt tax preparer from New Hope, Minnesota. I appreciate your attendance at today’s hearing and look forward to hearing about your experiences with H&R Block and Jackson Hewitt. 

Now, before we begin, pursuant to Rule 6, all witnesses testifying 

before this Subcommittee are required to be sworn. At this time I 

would ask you to please stand and raise your right hand. 

Do you swear the testimony you are about to give will be the 

whole truth, and nothing but the truth, so help you, God. 

Ms. GRANT. I do. 

Mr. ECKELBERRY. I do. 

Senator COLEMAN. Thank you. We have a full schedule. And 

while your written testimony will be presented in the record in its 

entirety, we ask that you limit your oral testimony to no more than 

5 minutes. When 5 minutes is expired, I will ask you to conclude 

your testimony. 

I would note in Washington we have a system of lights that 

make it easier to figure that out. Here we’ll just have to go with 

verbal prompts. 

Why don’t we begin with Mr. Eckelberry and then we’ll proceed 

with Ms. Grant. Mr. Eckelberry. 

TESTIMONY OF PAT ECKELBERRY,1 FORMER H&R BLOCK TAX 

PREPARER, WAYZATA, MINNESOTA 

Mr. ECKELBERRY. Good afternoon, Senator Coleman. My name is 

Pat Eckelberry. I presently have my own tax preparation business 

and am certified as an Enrolled Agent with the Internal Revenue 

Service. Tax preparation is actually my second career. In my first 

career, I was an electrical engineer for Honeywell. 

As I neared retirement with Honeywell, I began doing income tax 

preparation as a volunteer with a VITA affiliate, AccountAbility 

Minnesota, which I’ve continued to do. I’ve also worked for H&R 

Block, for a local firm, Tax Shop, and a CPA firm, Brunberg, 

Thorson and Diaby. 

Following my career with Honeywell, I first worked as a seasonal 

employee for H&R Block from December 12, 1996, until January 

22, 2001. 

I found there were a number of positive aspects in working for 

H&R Block. For example, Block had an excellent tax education system. As an employee, I was able to take many courses offered by 

them covering most aspects of taxation and the specifics of preparing many different types of tax returns. I also found that many 

of H&R Block’s tax preparers were conscientious and made a sincere effort to do the best job possible for their clients. It was evident that many tax preparers had developed a good working relaVerDate 0ct 09 2002 10:15 Aug 04, 2005 Jkt 021431 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\DOCS\21431.TXT SAFFAIRS PsN: PHOGAN
5

tionship with their clients who returned year after year and specifically requested those tax preparers. 

Throughout my tax preparation career, I found that there’s an 

extremely strong trust relationship between the preparer and his 

or her client. It is my opinion that a tax preparer has a clear ethical obligation to ensure that their clients claim every legitimate 

credit and deduction to which they’re entitled, and that the preparer ensure that their clients pay only the tax they are legally obligated to pay, and that the preparer offers advice on the refund 

method that best serves their client needs. However, this preparerclient trust relationship can present opportunities for abuse. While 

I was at H&R Block, management pushed very hard to require tax 

preparers to use the client-preparer trust relationship to sell such 

products as RALs, RACs, Peace of Mind, and other products. 

The RALs were particularly troubling to me because of their extremely high cost. We were strongly directed by Block District 

Management to push them, especially if the clients were going to 

have difficulty paying their tax preparation fee. The sales emphasis 

was on refund speed rather than client cost. 

In presenting RALs to clients, we were directed to point out that 

the client would receive their refund in days rather than weeks, 

and that they could have preparation costs subtracted from the refund, thus having their taxes filed without having to come up with 

any money out of pocket. 

While the paperwork disclosure of the fees and finance charges 

was thorough, it came after the verbal sales presentation. Their client had to sign a form indicating a willingness to obtain a RAL, 

and indicate that they understood it was a loan. The most negative 

aspect was that this product was often used by the type of client 

who could least afford it, who usually did not understand that they 

were applying for a loan, and who certainly, despite the written 

disclosures, did not understand the true cost of that loan. Most clients desperately needed every dollar of the refund they were entitled to, and I personally made every effort to fully disclose the true 

cost of the client. I would also suggest other less costly refund options such as e-filing with direct deposit, which can take as little 

as 8 days and costs nothing. 

I was not always successful in talking my clients out of taking 

a RAL. For example, one of my clients, a mother with ten children, 

wanted the refund as soon as possible in order to take advantage 

of clothing sales that were taking place at that time. 

Another product that I felt was a disservice to the client was 

called Peace of Mind. It was similar to selling a service contract 

with a purchase of a television or washer and dryer. Its stated purpose was to cover additional tax that the IRS would require if the 

IRS found an error committed by an H&R Block tax preparer or 

by the software program. As part of its tax preparation, Block provided coverage for interest and penalties for a Block-induced error 

at no additional cost. Because tax preparers typically do everything 

they can to prevent errors, the probability of the client needing additional insurance is extremely low. 

I’ve provided the Subcommittee with a copy of a Block memo 

sent to me and to all tax preparers in our district outlining the 

Peace of Mind sales procedure, and stating that we were to, ‘‘PERVerDate 0ct 09 2002 10:15 Aug 04, 2005 Jkt 021431 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\21431.TXT SAFFAIRS PsN: PHOGAN
6

1See Exhibit No. 6, which appears in the Appendix on page 173. 

2The prepared statement of Ms. Grant appears in the Appendix on page 40. 

SONALLY endorse this OUTSTANDING product.’’ We were next 

pitched this same message by the District Manager at a mid-season 

meeting for all tax preparers. 

During the 4 years I was with Block, the level of intensity to 

push the Peace of Mind guarantee was very high and increased significantly each year.1 Initially, clients had to sign a release indicating they had been offered a product and had declined to accept 

it. Subsequently, Block included the Peace of Mind guarantee in 

the tax return preparation package, at a cost of $20, and only removed it if the client specifically noticed it and refused to accept 

it. 

H&R Block encouraged its employees to sell these additional 

products through financial incentives to the preparer, and through 

our tax preparer performance evaluations. Tax preparers received 

15 percent of the system administration fee that was paid to H&R 

Block for completing the bank-related paperwork for a RAL. In addition, the number of RALs, RACs, etc., sold was part of our performance reviews. 

I’ve also provided a copy of my performance evaluation for the 

Subcommittee, which included a category for financial products 

such as RALs and RACs. As you can see from that, the evaluation 

reflects that sales of financial products was not one of my crowning 

achievements with H&R Block. 

Mr. Chairman, thank you for the opportunity to testify. I’m prepared to answer any questions you may have. 

Senator COLEMAN. Thank you, Mr. Eckelberry. Ms. Grant. 

TESTIMONY OF NILA GRANT,2 FORMER JACKSON HEWITT TAX 

PREPARER, NEW HOPE, MINNESOTA 

Ms. GRANT. Good afternoon, Senator Coleman. My name is Nila 

Grant, and I am presently employed as an associate analyst for 

United Healthcare Group. In 2003 and 2004, I worked as a tax preparer for Jackson Hewitt at the Uptown and North Broadway offices. I found my employment with Jackson Hewitt to be a rewarding experience. They provided excellent training that fully prepared 

me for my tax preparation responsibilities. 

I have always walked my clients through the tax preparation 

process using Jackson Hewitt’s tax preparation software. If my client was entitled to a refund, I explained the different options available for receiving the refund, including the time that it would be 

required and the associated costs of each option. 

The options include a direct deposit or a check from the IRS; a 

Refund Anticipation Loan or a Money Now loan; a refund anticipation check, which was referred to as Assisted Direct Deposit or an 

Assisted Check Refund. I did not push my clients toward any of 

these options, and Jackson Hewitt management did not encourage 

me or use pushy sales tactics to encourage clients to get a RAL or 

any other product offered by Jackson Hewitt. 

Most of my clients were low-income individuals or couples who 

specifically came to Jackson Hewitt to obtain a Refund Anticipation 

Loan. Many of my clients inquired about Refund Anticipation 

7

Loans before it was even presented to them. For example, Jackson 

Hewitt advertised the Money Now product on its office windows 

and people came in to ask how it worked. We could not guarantee 

that they would be approved for the loan or how much the total 

cost would be until we put their tax information into the computer 

because the rates varied based on the amount of the loan. 

I would always inform the client that they had the option to 

change their mind at the end of the process, but will be charged 

a fee of $20 for my time. Some clients will ask if it was expensive, 

and I would inform them that the average cost for a RAL was 

about $300. Many did not ask at all, but all of my clients had the 

option to change their minds at the end of the process before signing any forms. 

I believe many people would have liked to use other options but 

could not because they could not pay the tax preparation fee of 

$135 up front. Many simply did not have the funds to do that. Because the RAL deducts the fees from the anticipated refund, it 

made it easier to sell the RAL. At the end of the process, a few 

complained about the fee but mostly all took the loan if they qualified. 

My clients also had to sign forms saying that I had informed 

them about the loan and providing a breakdown of the actual fees 

associated with the loan. They also received copies of these forms. 

I have no doubt that my clients understood they were taking out 

a loan. Frankly, they did not care that it was a loan. They wanted 

the money as soon as they could get it. I realize that these loans 

have very high costs, but if my client was receiving a $3,500 refund, they did not mind paying $300 in tax preparation fees, finance charges, account setup, and administration fees. 

In the store where I worked, we also did not receive special recognition or other benefits for selling Jackson Hewitt’s financial 

products. I was told about the $5 commission for every Gold Guarantee sold, but it was not aggressively pushed on me to sell it, nor 

did I aggressively push it on my clients. I did offer it, but most people declined it. We did receive a bonus at the end of the tax season 

that was based entirely on the number of tax returns we prepared. 

Upon occasion, I would recommend to clients they visit a free tax 

preparation site if it would not be in their best interest to use our 

services or tax preparation. When clients’ incomes were below 

$10,000, I informed them of the free tax services and gave them 

contact information because the fees would probably have cost 

them half or more of their tax refund. I believe most clients were 

aware they could get their taxes prepared and filed for free, but 

chose to get them done faster because they did not want to wait 

and wanted money as soon as they could get it. 

In summary, there was no pressure or suggestive sales tactics. 

We didn’t have to use them. The clients wanted money as soon as 

they could get it, and many came to us solely for that purpose. 

Senator COLEMAN. Thank you, Ms. Grant. I see Ms. Burbach has 

joined us, and we’re very pleased. Welcome. 

Ms. BURBACH. Thank you. 

Senator COLEMAN. Witnesses before this Subcommittee are required to be sworn so I would ask you if you would please stand 

and raise your right hand. 

8

1The prepared statement of Ms. Burbach appears in the Appendix on page 42. 

Do you swear the testimony you are about to give before this 

Subcommittee will be the whole truth, and nothing but the truth, 

so help you, God. 

Ms. BURBACH. Yes. 

Senator COLEMAN. Thank you very much, Ms. Burbach. Ms. 

Burbach, please proceed. 

TESTIMONY OF JULIE BURBACH,1 H&R BLOCK CLIENT, ST. 

PAUL, MINNESOTA 

Ms. BURBACH. Mr. Chairman, Members of the Subcommittee, 

good afternoon. Thank you for the opportunity to share my experience with H&R Block with you today. My name is Julie Burbach 

and I’m a single parent raising an 8-year-old son. My gross income 

last year was $17,374. I have to stretch every dollar to make sure 

we have enough to get by. 

We live in an apartment in St. Paul. I quit my job last year with 

the State of Minnesota. I had worked for 17 years as a Human 

Services Technician at the Veterans Home. Since then, I’ve been 

working part-time and looking for another job. 

When it came time to file my Federal taxes this year I chose to 

go to H&R Block. I wanted my taxes done by an official tax preparation company. Because I had dipped into my retirement fund last 

year to cover expenses, I wanted to make sure my taxes were handled correctly. 

I filed my taxes in February. The whole process took 10 to 15 

minutes. The tax preparer did all of the preparation work and at 

the end told me that I was eligible to receive a refund. My Federal 

refund was for $2,454, including $927 from the Earned Income Tax 

Credit. My State income and property tax refund was $931. 

I had gotten Rapid Refund in the past and asked to get one at 

this time, to make sure I got my Federal refund as fast as possible. 

She asked me if I wanted Instant Money, or part of the money 

today. I said yes. I thought this meant I was getting a regular loan 

that had an early advance. At this point, the tax preparer appeared 

to complete the forms on the computer and printed them out. She 

showed me the costs. I was charged a total of $322.90. Of that, 

$203 was for tax preparation fees, and $119 was for bank fees. 

When I mentioned the cost, the $322 seemed high compared to 

last year when my total costs were $201.95. The tax preparer told 

me that was because last year was a trial period. 

I have since learned this is not true. While the tax preparation 

fees had gone up from last year to this year, the real extra cost was 

because I said yes to the Instant Money option. Rather than being 

given an advance on the loan, I was actually given two loans. This 

was the most expensive option. The APR for each was 129 percent, 

but the APR listed on the disclosure sheet required by State law 

said 122 percent. 

I felt that the total cost was quite expensive, but at this point 

I was confused and didn’t feel like I could change my mind because 

she had already finished all the paperwork. I was also thinking 

about all the bills I had to pay and I agreed to the $322 fee. 

9

The tax preparer did not explain that I was taking out two loans. 

She also didn’t suggest that I could change my mind right then and 

there, and that would be less expensive if I didn’t take out the 

loans. She didn’t explain I was taking the most expensive option. 

She also didn’t tell me that if I signed the loan agreement, I still 

had 2 days in which I could change my mind and not get the loans. 

She briefly showed me the disclosure page before I signed at the 

bottom. She didn’t explain what they meant, and I didn’t ask any 

questions about it because this is why I was having my taxes done 

by a professional tax preparer in the first place, because I don’t understand all the tax laws and financial wording and disclosures. 

If I understood all of my options about how to get my full refund 

to me, I would not have taken out a Refund Anticipation Loan. I 

received my State tax refund within 3 days in the mail. 

Now I understand more about Refund Anticipation Loans. All I 

really wanted was to get my taxes done well, and to get my refund 

so that I could pay my bills on time and do whatever would help 

me and my son the most. I understand that my refund is meant 

to help families like mine. That is why I don’t think it’s fair I 

should be charged so much money to get my taxes done and to get 

my refund quickly. 

Thank you for letting me share my story. 

Senator COLEMAN. Thank you very much, Ms. Burbach. And, by 

the way, thank you for your courage to come forward. It’s hard 

enough when you do this as I do each and every day. But for an 

average citizen to come forward and to very openly say I was confused, I walked into a situation and it cost me money, a lot more 

than you felt it should have cost, so I appreciate your courage and 

your honesty. 

And I do hope with your testimony today that others will listen 

and will think twice, and will be in a position to understand that 

there are questions that should be asked, and perhaps there are 

tax preparer’s questions that should be asked of you, so I really do 

believe something good will come out of this. So I want to say 

thank you. 

Mr. Eckelberry, Ms. Burbach talked about two loans. From what 

I understand, there’s really one loan she got. She got instant cash, 

right, which is one fee, and then the RAL besides that. If you were 

her preparer, could you talk a little bit about her situation, what 

was she being offered and what might you have done if you wanted 

to explain it to her better? 

Mr. ECKELBERRY. Well, the instant loan is something that’s been 

incorporated since I’ve been there so I’m not familiar with that either. 

But I surely would have explained to her that the opportunity to 

get your return very quickly existed without going through any 

process like that. 

Senator COLEMAN. Does it shock you that the APR was about 

129 percent? 

Mr. ECKELBERRY. I’ve seen it higher than that. We’ve seen percentages higher than that. 

Senator COLEMAN. And how high? 

Mr. ECKELBERRY. The number I recall is as high as 400 percent. 

10

1See Exhibit No. 5, which appears in the Appendix on page 172. 

Senator COLEMAN. Do clients understand what a 400 percent 

APR means? 

Mr. ECKELBERRY. No. The situation is they don’t have the money 

to pay for their return. They want it done. They want the refund 

as quickly as they can get it. 

Senator COLEMAN. And, Ms. Grant, I appreciate your perspective, 

that you didn’t feel pressured to push these, that you weren’t being 

evaluated on the basis of how many you made. On the other hand, 

do you believe your clients understand what a 300 APR is or a 400 

APR is? 

Ms. GRANT. No, not totally. When I explained, in breaking it 

down for them, that they had an understanding that they were 

paying high interest rates because we did show that to them, and 

some people did comment on it. 

Senator COLEMAN. Now, on the other hand, your clients came in 

you said looking for this. But in part, you’re saying as they walked 

by, your advertisement promoted it. 

Ms. GRANT. Right, correct. 

Senator COLEMAN. And out of curiosity, and I’ll ask this both of 

Mr. Eckelberry and Ms. Grant, were you working for your client or 

were you working for H&R Block or Jackson Hewitt? Who do you 

feel your primary responsibility was at the time you were preparing these? 

Ms. GRANT. I do feel it is to the client because it is their money. 

And to be honest about it, if they came in, and even if they signed 

the paper and they changed their mind, I would have tore it up. 

Senator COLEMAN. In your situation, Mr. Eckelberry—I don’t 

have the exhibit up here—but I looked at your evaluations, you’re 

being evaluated on the number of products that you sold.1

Mr. ECKELBERRY. That’s correct. 

Senator COLEMAN. Performance evaluation. 

Mr. ECKELBERRY. That is correct. It was part of our evaluation. 

At the meetings, it was made a big deal for the people who sold 

a lot of RALs or a lot of Peace of Minds, plus the financial remuneration. 

Senator COLEMAN. I don’t know if you have a copy of your evaluation. I have one here. 

Mr. ECKELBERRY. Yes. 

Senator COLEMAN. Five is exceeds expectations, and you got fives 

across the board in terms of quality interviews. Where you got your 

three, your lowest evaluation, was in terms of RALs, successfully 

offered refund rewards. So you weren’t as vigilant in offering those, 

were you, as in the other categories? 

Mr. ECKELBERRY. No, I was not. And to answer your earlier 

question to both of us on this, I really felt my responsibility was 

to the client. But my situation was a little different than many of 

the other tax preparers. The only way to make any real money 

working for Block as a tax preparer is to sell those products. 

Senator COLEMAN. And I appreciate that. As I listen, I appreciate 

from both of your perspectives saying that you believe that’s what 

your obligation was. But my sense is in looking at a system that 

provides rewards for selling product, that promotes product sales, 

11

it appears to me that at that point your interest is to your employer who is paying you a paycheck, though personally it should 

be to your client. But if you’re working in a system that’s pushing 

product, then I question whether in fact you can be as true as one 

should be to your client. 

Mr. ECKELBERRY. Well, I felt I could be, but my situation was 

that I was retired and I wasn’t dependent upon this income. But 

many of the other tax preparers depended on this additional income, and so they responded to the pushing by selling the stuff. 

Senator COLEMAN. Again, Mr. Eckelberry, Ms. Grant, and Ms. 

Burbach, very admittedly, the sense I got is that you were confused. Is that a fair statement? 

Ms. BURBACH. Yes. 

Senator COLEMAN. Mr. Eckelberry, does that surprise you? There 

was a client getting the explanations and getting what she got and 

still being confused? 

Mr. ECKELBERRY. Not at all. In fact, I don’t think most of them 

really didn’t listen to the explanations. The only thing they heard 

was they could get their money in a few days. They didn’t have to 

pay up front to get the job done. 

Senator COLEMAN. Ms. Grant, does that surprise you? 

Ms. GRANT. I agree with that too because basically they were in 

a rush, and some of the sales in our office was based on how many 

tax preparations we did to get a bonus. So we did kind of rush 

through it or go through it rather quickly. 

The average tax preparation took about 20 to 30 minutes if it 

was fairly simple. And most people just sign the papers. We did 

show them what they were signing, but did they read it, no. 

Senator COLEMAN. When clients came in asking for the Refund 

Anticipation Loan, did you walk through them less costly alternatives that would serve their needs but would not cost them as 

much? 

Ms. GRANT. When they walk in we have place mats that had 

each individual option that they had available to them. And a lot 

of people looked at it but they knew they wanted the Money Now 

loan. 

Senator COLEMAN. Mr. Eckelberry, same question. 

Mr. ECKELBERRY. I’m sorry. 

Senator COLEMAN. The question was, if somebody came in looking for a RAL, would it be practice for H&R Block to explain to 

them there were cheaper alternatives available that would best 

suit their needs? 

Mr. ECKELBERRY. It was definitely my practice to explain all the 

options. I definitely did do that. But I don’t think that was necessarily standard practice. Like I said, my situation was very different than many of the other tax preparers. 

Senator COLEMAN. And your situation, in particular, you had 

concern over Peace of Mind, which is not the focus of this hearing. 

But again, that was another product, another additional fee for 

something that you felt was unnecessary. 

Mr. ECKELBERRY. That’s right. And we were told to stick it in the 

return and only remove it if they saw it. 

Senator COLEMAN. And in fact, you were evaluated, specifically, 

one of the pieces of your evaluation, specific section has to do with 

12

Peace of Mind, whether you properly offered it, explained and accepted. 

Mr. ECKELBERRY. Yes. 

Senator COLEMAN. And then there was an option for the total 

number of them. So your performance was in part based on the 

number of products you sold. 

Mr. ECKELBERRY. That’s correct. 

Senator COLEMAN. Rather than whether you met the needs of 

your client. 

Mr. ECKELBERRY. That’s correct. 

Senator COLEMAN. One other question. In my opening statement 

I talked about RALs being high risk, but as I listen to the testimony, it appears to me that the risk would be very minimal, that 

in fact you know what the tax refund is going to be. The refund 

would cover the loan. The money comes back directly from the 

bank to you. 

If one of the justifications for high APR is high risk, what is the 

risk to the company, to the preparer? I mean, your fee is getting 

paid up front with the RALs. Am I mistaken in that? 

Mr. ECKELBERRY. The risk would be in that you wouldn’t know 

if the client had some outstanding debt that might be covered by 

the refund that would be taken away. So if they got a check the 

day they were there, you wouldn’t have known at that time that 

there was some risk involved. 

Senator COLEMAN. Some risk to the bank. 

Mr. ECKELBERRY. But not if they didn’t get a check for 2 or 3 

days because by then you should have had that information. 

Senator COLEMAN. Ms. Grant. 

Ms. GRANT. As far as I’m concerned, the risk, I’m unaware. Most 

of the loans or the APR finance charges were based on the amount 

of the loan. That’s all I knew. So if they were high fees, it was 

based on the amount of the loans. That’s about it. 

Senator COLEMAN. Ms. Burbach, did the preparer tell you that 

you had 2 days to rescind your RAL? 

Ms. BURBACH. No. And if you owed anything back, it would come 

out of your State tax return, not your Federal. You were only getting a loan on your Federal. Your State comes to you in the mail. 

Mr. ECKELBERRY. That’s a good point. 

Senator COLEMAN. So again, there is very little risk? 

Ms. BURBACH. Right. 

Senator COLEMAN. Did anyone process—did your preparer tell 

you you didn’t have to take out a RAL, that there were some other 

options that were less costly and would have suited your needs? 

Ms. BURBACH. I guess I didn’t—I was kind of at their mercy. 

Senator COLEMAN. And you wanted cash, got cash up front and 

you wanted it done quick. 

Ms. BURBACH. Yes. And I wanted it done by a professional that 

I thought I could trust. 

Senator COLEMAN. Were you asked by the tax preparer the reason for why you needed it so quickly or what the nature of the obligation was? What the need for speed was? 

Ms. BURBACH. No. 

Senator COLEMAN. If any. 

Ms. BURBACH. None at all. 

13

Senator COLEMAN. Either Mr. Eckelberry or Ms. Grant, did you 

ever question clients about whether they really needed money so 

quickly? 

Mr. ECKELBERRY. Absolutely, because I didn’t want them to do 

that. 

Senator COLEMAN. But again in your situation, what I understand your testimony as, I get the sense that you did not believe 

that was a standard practice among others working in your shop. 

Mr. ECKELBERRY. No. 

Senator COLEMAN. And again, your situation, because you’re retired, this was a second income, you weren’t being pushed to earn 

extra dollars by selling product. 

Mr. ECKELBERRY. Right. 

Senator COLEMAN. But as I understand your testimony, the testimony is that in fact within a shop, within the operation that was 

the standard practice and procedure. 

Mr. ECKELBERRY. I would say that. 

Senator COLEMAN. To the best of your knowledge. 

Mr. ECKELBERRY. Yes. 

Senator COLEMAN. Ms. Grant. 

Ms. GRANT. Mainly—I’m sorry. I forgot. Could you just repeat 

the question again? 

Senator COLEMAN. I’m just trying to get a sense, did you inquire 

of your clients if they really needed the money today. And if they 

didn’t, was there another path for them that was less expensive? 

Ms. GRANT. Well, no, I didn’t inquire, but a lot of people came 

in and told me. Some of them were looking for a new car or looking 

to pay off bills from Christmas. 

No, I didn’t inquire a lot about why they needed it so quickly. 

Senator COLEMAN. But even looking for a car, paying bills, they 

probably could have waited 2, 3, or 4 days. 

Ms. GRANT. Yes. They had the option because it was presented 

right there in front of them. And a lot of people did ask what is 

this one, what is this option, OK. And I explained it to them. 

Senator COLEMAN. When you say in front of you, it was in writing; is that correct? 

Ms. GRANT. Yes. 

Senator COLEMAN. Do you think it would have been helpful if 

you had instructions to say in words some of those things that were 

in writing? Because as I understand, they were in front of the desk, 

they were standing right there. Do you think it would have been 

helpful to folks like Ms. Burbach if you would have taken the time 

to verbally explain what otherwise was sitting there in writing on 

your desk? 

Ms. GRANT. Yes, I do believe so. 

Senator COLEMAN. Mr. Eckelberry. 

Mr. ECKELBERRY. Well, of course. 

Senator COLEMAN. And, Ms. Burbach, you wanted to say something. I’d love to hear it. 

Ms. BURBACH. I was going to say, last year I got the loan again, 

and it had to clear through my bank for 7 days so I got this loan 

and I wasn’t able to get my money for 7 days anyway. Now, if it’s 

this big of a company, shouldn’t it have like cleared right away? 

I don’t understand why I had to wait. I paid all that money to get 

14

1The prepared statement of Ms. Haney with attachments appears in the Appendix on page 

44. 

my loan that day, and then it was 7 working days before I actually 

received the money. 

Senator COLEMAN. I take it that this year you’re not looking for 

a Refund Anticipation Loan. A lesson learned, Ms. Burbach. 

I want to thank the panel. Is there anything else you wanted to 

add, Ms. Burbach? You came in a little late. Anything you want to 

say to others who are out there listening? 

Ms. BURBACH. Be patient. 

Senator COLEMAN. Very sage advice. I want to thank you all for 

your testimony today, and this panel is excused. 

I would now like to welcome our second panel of witnesses. It is 

my pleasure to welcome Beth Haney, who is the Research and Outreach Director for Children’s Defense Fund here in St. Paul. 

And Bonnie Esposito, the Executive Director of AccountAbility 

Minnesota, also here in St. Paul. 

I appreciate your attendance at today’s hearing and look forward 

to hearing your testimony. It is especially important that we fully 

understand the impact of Refund Anticipation Loans on low-income 

and elderly Minnesotans and show how these costs can be minimized with the use of free tax services. 

As you’ve observed, pursuant to Rule 6, all witnesses before this 

Subcommittee are required to be sworn so I would ask you to stand 

and raise your right hand. 

Do you swear the testimony you are about to give before this 

Subcommittee will be the whole truth, and nothing but the truth, 

so help you, God. 

Ms. HANEY. I do. 

Ms. ESPOSITO. Yes. 

Senator COLEMAN. Thank you very much. 

Ms. Haney, we’ll go with you first and follow with Ms. Esposito. 

After you finish with your testimony I’ll have the opportunity to 

ask questions. 

Again I would ask that you try to limit your testimony to about 

5 minutes. Your full statement will be presented into the record in 

its entirety. When the 5 minutes are up, I’ll give you a verbal signal if that’s needed. 

So let’s begin with Ms. Haney and we’ll follow up with Ms. 

Esposito. 

TESTIMONY OF BETH HANEY, PH.D., 1 RESEARCH AND OUTREACH DIRECTOR, CHILDREN’S DEFENSE FUND, ST. PAUL, 

MINNESOTA 

Ms. HANEY. Thank you, Senator Coleman. Thank you for this opportunity to testify about Refund Anticipation Loans and their impact on working Minnesota families. 

I’m the Research Director for Children’s Defense Fund Minnesota. Children’s Defense Fund is a private, nonprofit organization with a more than 30-year history advocating for children, particularly poor and minority children and those with disabilities. 

Our mission is to Leave No Child Behind, and to ensure that every 

child has a healthy start, a head start, a fair start, a safe start, 

15

and a moral start in life, as well as successful passage to adulthood 

with the help of caring families and communities. 

RALS are of vital interest to CDF because they dilute the efficacy of the Earned Income Tax Credit. The EITC arguably is this 

country’s most effective and efficient anti-poverty tool, and we believe a potent force for enhancing child well-being. In 2002, it lifted 

almost 5 million working Americans out of poverty, more than half 

of them children. 

In Minnesota, more than 242,000 low- to moderate-income working families claimed approximately $378 million from the EITC in 

2004. This part of the tax code rewards family’s work efforts and 

helps keep the tax system more fair for them. Families spend the 

majority of their EITC refunds on basic needs like utility bills, 

rent, food and clothing for their children. Consequently, the EITC 

helps stabilize them and keeps them in the work force and off welfare. 

In addition, much of the money is spent immediately, boosting 

the local economy by benefiting grocers, retailers and other local 

businesses. 

However, the value of the EITC to families and the broader community is eroded by RALs. During the 2003 tax filing season, an 

estimated $5.1 million of Minnesota EITC refunds were diverted to 

pay for RALs, not meeting basic work family’s needs. 

Our concerns with RALs include: 

First, they can be alarmingly expensive. We estimate the average cost to be about $100, which is about 6 percent of the average Minnesota EITC refund. This causes the average APR and average refund to be 234 percent. This predatory rate is more than ten times 

the APR ceiling Minnesota established to protect consumers. State 

law limits APRs on consumer loans to 21.75 percent. However, 

RAL brokers circumvent State usury laws by partnering with federally-chartered banks, which are permitted to ignore State interest rate ceilings. 

Second, research shows that commercial tax preparers target 

their services to low-income tax neighborhoods, where financial literacy is often limited. According to one study, neighborhoods with 

more EITC filers have about 50 percent more electronic tax filing 

and preparation services than neighborhoods with fewer EITC filers. Statewide, only about one in five EITC filers got a RAL in 

2003, but the percentage was significantly higher in our most impoverished communities. In four of the zip codes on Minnesota’s 

northern Indian reservations, where more than half of all returns 

include the EITC, more than three-fourths of EITC families got a 

RAL. More than half of EITC claimants got a RAL in some of the 

poorest Twin Cities neighborhoods. 

Third, as a result of extensive protesting last tax season by the 

consumer advocacy group ACORN, H&R Block agreed to improve 

the disclosures it gives to customers about the costs and speed of 

refund options and to drop their administrative fee. However, we 

question how well the terms of this agreement are actually being 

implemented in local tax preparers’ offices. 

This tax reason, advocates across the Nation have spoken with 

H&R Block clients, such as Julie, who say they were not provided 

with the improved disclosures informing them of each of their opVerDate 0ct 09 2002 10:15 Aug 04, 2005 Jkt 021431 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\21431.TXT SAFFAIRS PsN: PHOGAN
16

1The prepared statement of Ms. Esposito with an attachment appears in the Appendix on 

page 57. 

tions. Many tax preparers push clients into taking out loans based 

on the profit they personally receive, as you so noted, not corporate 

policy. 

ACORN is currently negotiating a similar agreement with Jackson Hewitt, but other tax preparers, including Liberty Tax, and 

local independent tax preparers, even retailers and car dealerships, 

broker RALs. Thus, even the existence of agreements with the two 

largest companies does not fully address the full scale of the problem. 

Finally, there’s evidence that many families do not comprehend 

they’re initiating a loan when they opt for Instant Money, Money 

Now, or the other terms used to market RALs. 

According to a December 2004 poll, 70 percent of respondents 

who had gotten a RAL did not realize it was actually a loan. Furthermore, because many RAL users have limited literacy skills 

and/or English proficiency, even if they sign written disclosure 

forms, they might not fully comprehend them. 

It’s not surprising that a public policy as effective as EITC has 

had strong bi-partisan support in Congress. Senator Coleman, we 

appreciate the backing you’ve shown the EITC, and we hope we 

can rely on you to champion it in the current Federal budget debate. 

The public funds dedicated to tax credits like the EITC are 

meant to strengthen low- to moderate-income families and reward 

them for their work effort, and this has been proven to work. The 

public funds were not meant to provide financial windfall for the 

tax preparation and banking industries. Loans using the EITC 

should not be allowed, for the same reason Social Security benefits 

cannot be used as collateral for a loan. The idea is that the benefits 

are too important to the recipients to let lenders take them to 

repay their debts. 

I believe it’s a cruel paradox that because of their trust and relying on paid tax preparers, professionals, families believe are there 

to help them and they trust them, eligible working Minnesota families trying to claim their EITC and get ahead could end up in significantly worse financial jeopardy. 

I thank you again for the opportunity to testify, and further information regarding our stance toward RALs can be found in my 

written testimony. 

Senator COLEMAN. Thank you very much, Ms. Haney. Ms. 

Esposito. 

TESTIMONY OF BONNIE ESPOSITO,1 EXECUTIVE DIRECTOR, 

ACCOUNTABILITY MINNESOTA, ST. PAUL, MINNESOTA 

Ms. ESPOSITO. Senator Coleman, thank you for this opportunity 

to testify before you today on free tax assistance for low-income 

Minnesotans. 

I’m the executive director of AccountAbility Minnesota, a nonprofit organization that does pro bono accounting and tax assistance by leveraging volunteer resources. Since 1971 AccountAbility 

has managed a dedicated team of volunteer accountants and tax 

17

1See Exhibit No. 2, which appears in the Appendix on page 169. 

practitioners to help thousands of low-income individuals navigate 

the tax reporting system so they may satisfy a tax liability, or realize benefits they’re due. 

The Earned Income Tax Credit, as you just heard, and the Minnesota Working Family Credit offer essential assistance to thousands of Minnesota’s working poor. The sum of these credits can 

potentially add 50 percent to a working family’s annual income. 

To give you a sense of our work at AccountAbility, last year our 

volunteers at 40 tax sites statewide helped return $10.9 million in 

tax refunds to 9,500 low-income tax taxpayers. 

AccountAbility is one of many nonprofit organizations that offer 

free tax assistance through the IRS Voluntary Income Tax Assistance program, VITA, and Tax Counseling for the Elderly, or TCE 

program. This year in Minnesota, the Minnesota Department of 

Revenue reports there are 276 VITA and TCE sites, as you pointed 

out on the map in front of us.1 And as you mentioned, according 

to the IRS, 41,000 Federal returns were filed by free tax sites in 

2004. Yet, over 200,000 low-income families claimed EITC, which 

means they were eligible for the free service, thus only a small 

fraction of the households eligible for the service take advantage of 

it. 

The tax code, especially the part governing the EITC, is complex. 

Rather than attempting to complete their taxes themselves, as you 

heard in earlier testimony, two-thirds of low-income Minnesotans 

pay to have their taxes prepared and filed. Children’s Defense 

Fund estimates that low-income Minnesotans spend more than 7 

percent, or about $120, of the average EITC refund just to claim 

it. In 2003, at least $18.5 million of the Federal EITC dollars 

claimed in Minnesota were spent on tax preparation and filing 

costs. 

Why don’t more low-income families take advantage of the free 

tax assistance? We believe there are a number of reasons. First of 

all, lack of capacity of the VITA program. VITA sites are usually 

filled to capacity with long waiting lines for service. People are frequently turned away, especially at this time of year. For example, 

this week at almost all the tax sessions that we operated, people 

were turned away. 

Also, due to funding cuts to the IRS they’ve had to cut back services substantially to the VITA program, and they’re no longer able 

to recruit or train volunteers, or offer technical assistance at VITA 

sites as they used to. IRS walk-in centers used to be able to handle 

the most difficult tax problems, but again, due to constraints in 

funding, they’re unable to do so. Last year, as you reported, the 

IRS prepared only 139 Federal returns at their walk-in centers for 

EITC eligible households. We find in Minnesota they’re referring 

many of the taxpayers they used to help to our tax sites. 

A second reason we believe people don’t come to the free tax sites 

is that they’re often at inconvenient times or inconvenient locations 

to receive the service. Of the 276 dots on the map, only 15 to 20 

percent are VITA sites. The rest are Tax Counseling For the Elderly, or TCE. 

18

Now, many TCE sites also help families, but that program is targeted to seniors. They’re often in senior buildings, the sites are in 

senior centers, and they’re open in the daytime, which is inconvenient for working families. Many of the TCE sites serve seniors first 

since they are run by the AARP, and help families only if the volunteers have time. 

In contrast, to make it convenient for working families, VITA 

sites are open evenings and weekends. They’re also often located in 

community-based sites where families are used to going for other 

types of service. However, VITA tax sites are severely under-funded and are unable to serve more than 3 percent of the eligible 

households. 

The third reason we believe people don’t come is just plain lack 

of advertising dollars. H&R Block, Jackson Hewitt, and other commercial tax preparers have multi-million dollar budgets to aggressively market their instant refunds. Nonprofit organizations with 

limited dollars rely on grass-roots marketing and networking. Commercial ads lead people to believe they must use a commercial preparer to get their refund quickly. The public isn’t aware how quickly you can get your money if you file electronically and have your 

refund direct deposited. 

AccountAbility Minnesota customers using direct deposit this tax 

season got their State refund in 3 days, only 1 day longer than the 

classic Refund Anticipation Loan. And they didn’t have to pay over 

$120, plus $100 for the loan, to get their own money. 

We have some suggestions for improvement. First of all, organize 

and sponsor a major marketing campaign with a public/private 

partnership among government, Minnesota’s largest companies and 

employers, and major philanthropic partners to advertise not only 

the EITC, but also free tax assistance. 

Second, have the partners make a commitment to have their 

employees volunteer, thereby setting an example to spur additional 

recruitment. 

Third, have the businesses and philanthropic partners announce 

their investment in the VITA program through private grants. 

Fourth, Congress needs to contribute Federal funding through 

such legislation as the Taxpayer Protection and Assistance Act 

being introduced in Congress today. We understand this bill also 

mandates Treasury to do a public awareness campaign on RALs. 

This would be a perfect partner to a Minnesota campaign promoting free tax assistance. This type of campaign would help advertise the free service to people that need it. It could help recruit 

volunteers that are needed to expand the service, it would stimulate private funding to help non-profits that manage VITA sites increase their capacity, and offer more service. 

Senator Coleman, I ask that you consider being a champion for 

this campaign in Minnesota, and represent the government sector. 

And I invite you to volunteer at an AccountAbility Minnesota site 

next year. 

[Applause.] 

Thank you again for this opportunity to testify before you today. 

According to a study done by CDF Minnesota, low-income families paid over $23 million last year for tax preparation and Refund 

Anticipation Loans and fees, much of that going to out-of-state 

19

banks. Please help us keep more of those dollars in the pockets of 

the working poor in Minnesota by expanding free tax assistance. 

Senator COLEMAN. Thank you very much, Ms. Esposito. Ms. 

Haney, we talked a lot about EITC, the Earned Income Tax Credit. 

Would you for the record walk through a very brief explanation of 

what that is, and what that means? 

Ms. HANEY. Sure. The Earned Income Tax Credit is a refundable 

type credit, which is an incredibly important part of it. Many tax 

credits are non-refundable, which basically mean they bring your 

tax liability down to zero. If they’re refundable, that means if 

you’re eligible for more than what brought your tax liability to 

zero, then that part is refunded to you or sent to you in a check. 

Most families that claim the EITC don’t actually owe any income 

tax to the government and that’s because when they take their 

standard deductions and exemptions, they haven’t earned more 

than what none of us pay tax on, the first $15,000 to $18,000 that 

we earn. They are then eligible to receive that entire amount back 

in a refund. 

What I said before, it helps keep the tax code fair because, in 

part, they pay a disproportionate share of their income in other, 

sales tax, excise tax and payroll taxes, and so that helps refund to 

them part of what they’re paying those other taxes as well. 

Senator COLEMAN. So in the end, they get cash in their pocket. 

Ms. HANEY. Exactly. 

Senator COLEMAN. This is a big part of it. 

Ms. HANEY. Exactly. It’s an incredibly important part of it. 

Senator COLEMAN. I think Mr. Eckelberry left. I wanted to personally thank him. Today is April 15, he’s a tax preparer, and he 

was here and he spent time being here. So my humble apologies. 

I’ll send him a copy of this in the record, but I did want to thank 

Mr. Eckelberry for being here. 

Ms. Haney, did it surprise you that there were signs in the window promoting instant cash, as one of the witnesses testified to? 

Ms. HANEY. Not at all. We’ve seen the signs ourselves. When I 

personally drive through the poor income neighborhoods, I see the 

billboards, I see the signs, so I’m not at all surprised. 

Senator COLEMAN. I asked the question about where’s the principal responsibility? Is your principal responsibility to the client or 

is it to your firm?. And I appreciate the witnesses we had who, I 

think reflecting their ethical sense that it should be to the client, 

though my sense as I listened, they have a system set up that really is otherwise directed. You’re going to be judged based on how 

many products you sold. Your obligation, obviously, is to the firm. 

Can you talk a little bit about what kind of ethical standards 

there are for tax preparers today, and what kind of ethical standards there should be? For both of you, Ms. Haney first and then 

Ms. Esposito. 

Ms. HANEY. In Minnesota 2 years ago in 2003 we passed a State 

law that actually was for standard of conduct for tax preparers, 

and it’s the first of its kind, I believe, across the Nation. That created some pretty simple standards as far as we were concerned in 

terms of pretty basic things that should be illegal anyway but we 

had to put it into law. 

20

And it was based completely on experiences that a lawyer, a colleague I work with, had with low-income clients. However, that law 

I don’t believe addresses exactly what you’re asking, which is to 

whom is the tax preparer working in the best interests of? 

I believe that when families walk in the door they’re going to see 

a professional, in their opinion, and they totally and completely put 

their trust in that person. They do not understand the tax code. 

The EITC tax booklet is 53 pages long and it’s tax language so I 

hardly understand it. 

I believe they go there to see a professional, and that there 

should be some way to ensure that professional is working in their 

best interest. I’m not again surprised, however, to hear that those 

tax preparers have a little bit of a conflict as to who exactly they 

should be helping, and which best self interest they should be 

working in. 

Senator COLEMAN. Ms. Esposito, could you respond to the question about ethical standards? 

Ms. ESPOSITO. Absolutely. The majority of our volunteers in fact 

are CPAs, accountants. Many of them, as Mr. Eckelberry, do taxes 

themselves. And I can say 100 percent of them are appalled by 

RALs, because, in fact, what it does is take advantage of people 

when they are most vulnerable, especially now when people can get 

their refunds so quickly if they use e-filing and direct deposit. 

Our experience with our own customers that come to us and 

maybe for years they’ve gone to H&R Block or others, and they just 

are so surprised when we look at their tax papers and point out, 

do you know you have a loan? And they disregard it. They said oh, 

no, I just got my money fast. So they’re really taking advantage of 

a vulnerable population. 

And the idea that, while people need their money right away, as 

you said, gee, could they wait 3 or 4 days, the fact is if they are 

desperate for their money, say, their landlord is going to evict 

them, we can call the IRS and that is considered under—what’s it 

called? 

Ms. HANEY. I’m not sure. 

Ms. ESPOSITO. It’s like being under duress. A hardship case, 

that’s what it’s called. And they can go downtown St. Paul that 

afternoon or the next day and get the check. So it is possible, if 

they really need it, to get their money right away, even at our free 

clinics. So as the earlier person said, it is a matter of waiting. 

Our experience as far as ethical CPAs and tax practitioners are 

that all volunteers that work for us feel that it is unconscionable 

to take advantage of people. 

Senator COLEMAN. The testimony of the first panel talked about 

APRs up to 400 percent. I’ve actually read more in some other 

cases. 

First, can you explain what an APR is? And, second, do you believe that your clients, EITC clients think they understand, and are 

well briefed on what APRs are? 

Ms. HANEY. Well, APR, the annualized percentage rate, which 

essentially is the total cost of the loan expressed over the cost of 

a year. And really you need to, even for a short loan like a RAL, 

you need to think of it that way because that’s how you can comVerDate 0ct 09 2002 10:15 Aug 04, 2005 Jkt 021431 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\DOCS\21431.TXT SAFFAIRS PsN: PHOGAN
21

pare apples to apples when comparing one loan product to another. 

So it’s the standard in terms of the industry to create the APR. 

I should actually clarify in terms of Ms. Burbach’s situation. I’ve 

actually seen her documentation from this year and she actually 

did take out two loans. At least she signed two loan disclosure 

forms. And for one of the loans it was 129.61 percent and the other 

loan was expressed at APR of 129.16 percent. And then again, the 

State disclosure form she signed said 122 percent. 

So I do not think they understand what an APR is. When I was 

doing this research, ‘‘Oh, that interest rate thing,’’ and I think 

that’s how most people would talk about APRs. And they think 

that percent is the entire amount applied to it. 

The APR includes both any straight fee that you pay up front, 

plus any interest that would accrue if the loan was not repaid. But 

I don’t think the general public understands that, and definitely I 

don’t think the EITC families do. 

Senator COLEMAN. In addition to the APR, there appeared to be 

fees for setting up the bank account—there appeared to be a number of different fees along the way. Are they all included in the 

APR, fees from the bank, fees for the preparation, are they all one 

fee or are there additional charges in addition to the APR? 

Ms. HANEY. I think it depends on who’s calculating the APR. 

When I calculate in my research the APR, I look at the total cost 

of the loan so I don’t include tax preparation fees. I do include any 

fees to set up the loan, any administrative fees, the finance charges 

themselves. 

I don’t know if that’s an industry standard, however. I have been 

told that sometimes the industry actually doesn’t include some of 

those fees because they don’t consider those to be part of the loan. 

They consider those to be something that you would need to pay 

to get your refund. 

Senator COLEMAN. Ms. Grant noted in her testimony, the former 

Jackson Hewitt tax preparer, she did indicate that on her desk 

were written materials that described some other alternatives 

other than RALs. Do you think that’s sufficient notice to individuals coming in to make them fully aware of what other choices are 

out there? Is there a better way to do it than just simply having 

some written things on a desk? 

Ms. HANEY. I believe requiring oral disclosure is a fantastic first 

step. We actually tried to put that into the legislation at the State 

level 2 years ago but weren’t able to. 

But I know that a lot of the families who claim the EITC have 

English as a second language or literacy issues, so I really doubt 

if they took the time, they couldn’t even read and understand exactly what they’re being asked to sign. 

In addition, I think it’s a very intimidating atmosphere. And 

when you’re being rushed by your tax preparer and your tax preparer is saying sign this, sign this, it’s very difficult at that moment to say just a minute, I want to sit down and read and understand everything, when you know there’s a line of people waiting 

to have their taxes done. 

Senator COLEMAN. Ms. Esposito, you talked a little bit about the 

disclosure, what do you consider to be the best way to proceed with 

that. 

22

Ms. ESPOSITO. Well, we of course deal with customers all the 

time in doing their taxes, and one of the reasons our tax sites are 

full and people are waiting is because we take the time necessary 

to explain. We really feel our job is not just to do the taxes but to 

empower the customers to understand taxes. Because eventually, 

they’re working and they’re working their way off being eligible for 

our program, and perhaps starting to do their own taxes 1, 2, or 

3 years down the road. So our tax preparers really do take a lot 

of time. We don’t give them a lot in writing. 

Our customers last year reported 76 different languages as their 

primary language. And, not only with English as a second language 

but other literacy problems, reading can be a problem. So we do as 

much as we can verbally and really take the time, even though 

people are waiting. But with each customer, it just takes time to 

explain it. 

Senator COLEMAN. You talked about hardship cases. Do you offer 

Refund Anticipation Loans or something similar to taxpayers, who 

were hardship cases? Tell me, how do you deal again with folks 

who have legitimate need for some quick dollars. 

Ms. ESPOSITO. Actually it’s not a loan. We call the IRS. We call 

the IRS advocate and they just respond fabulously. And people can 

actually go down and get a check the next day. 

And it’s right from the IRS so they’re getting their own refund 

because they can prove it’s not for something minor like well, ‘‘Gee, 

I want to go to Florida or something.’’ It has to actually be a hardship. Maybe they’re being evicted or something like that. But the 

IRS gives them their money so there’s no loan involved. 

Senator COLEMAN. Ms. Haney, is it your testimony that RALs 

should not be available for folks who use EITC, or do you believe 

that there are ways in which you can reduce the cost of RALs and 

other financial products? 

Ms. HANEY. Well, Senator Coleman, I’m optimistic. I believe 

both. 

Senator COLEMAN. Sign of a politician. 

Ms. HANEY. I would rather there not be loans based on the EITC, 

quite honestly. As I said earlier, I believe the precedent is set in 

Social Security benefits, and I would like to see Federal legislation 

that does the same thing. 

That said, I guess I am a little bit more realistic and realize that 

might not necessarily come to pass. And so I do believe there are 

alternative ways we can make them more affordable. 

I also believe in the creativity of the industry, as well as the nonprofits and the rest of the community, and I believe there are other 

ways that we can help families. 

I know there are some things that could be done to speed up the 

process. So, for example, the IRS is working and has been working 

for a long time on making those refunds come more quickly. I know 

there are some issues in terms of their funding right now, that 

they’re not able to do that at the rate they wanted to, but I think 

there are many different ways we can look at this problem and 

make it better. 

Senator COLEMAN. I appreciate that optimism. And you’ll see 

from the next panel where we have representatives from H&R 

Block and Jackson Hewitt that we are having discussions and we 

23

1The list of sites appears in the Appendix on page 59. 

are getting levels of cooperation. So I would hope that would continue so that we could better address this. 

Ms. Esposito, your perspective on this? Should we simply ban 

RALs or are there ways we can reduce costs? When I say ban, ban 

in terms of not allowing Earned Income Tax Credit dollars to be 

factored off into the high cost of the RALs. 

Ms. ESPOSITO. In a perfect world, I would want them to get 100 

percent of their refund like our customers do, without taking a 

loan. But the fact is there is a need there and the people do want 

the money right away. But we very much are working with the 

philanthropic community and credit unions to try and come up 

with alternatives. And there’s demonstrations around the country 

through the National Community Tax Coalition to offer a better 

product, something that doesn’t take advantage of people when 

they’re vulnerable, and gets them their money quickly. 

But an important part of it needs to be that they establish an 

account with the bank. When they get a RAL, although they open 

this bank account, that’s not their savings, that’s not where they’re 

going to go and bank next Tuesday or Wednesday, where if they 

got a product that was more reasonable, and it was their community credit union, then maybe they would leave some of that money 

in the savings account and start on that road to asset building and 

the whole idea of perhaps being able to buy a home, pay for college 

for their kids and so forth. 

Senator COLEMAN. So rather than just using the bank as a vehicle to process a loan for purposes of getting the RAL, what I’m 

hearing you say is perhaps you can use this process to set up a savings account and a banking relationship? 

Ms. ESPOSITO. Exactly. 

Senator COLEMAN. A savings mentality and other things that 

could have some long-term positive benefits. 

Ms. ESPOSITO. Exactly. 

Senator COLEMAN. Outstanding. I’ll excuse this panel. I want to 

thank you very much for your testimony, and I appreciate your 

hard work in this area. It is greatly appreciated. 

Ms. HANEY. Thank you. 

Ms. ESPOSITO. Thank you. One thing I didn’t mention, I did bring 

the list of the sites.1

Senator COLEMAN. And we will take that and make sure those 

are entered into the record. Thank you very much, Ms. Esposito. 

We would now like to welcome our final witnesses for today’s 

hearing, Gary Weinstein, Vice President of Legal and Government 

Affairs at Jackson Hewitt Tax Service; and Robert Weinberger, 

Vice President of Government Relations at H&R Block. 

I appreciate your attendance at today’s hearing and look forward 

to hearing your testimony, as well as your response to the testimony for the first two panels. If RAL costs can be minimized, an 

effort must begin with obviously your respective companies. 

I do want to commend Jackson Hewitt for your efforts to make 

your products more consumer friendly. As I indicated to the previous panel, you’ve been having ongoing discussions with the Subcommittee. I do understand that there was a $10 surcharge, and 

24

1The prepared statement of Mr. Weinstein with attachments appears in the Appendix on page 

141. 

I think you’ll talk about that, Mr. Weinstein, a $10 surcharge Jackson Hewitt had been using with the EITC recipients that I think 

will no longer be in effect, and we appreciate those efforts. 

Gentlemen, as you are well aware, pursuant to Rule 6, all witnesses before this Subcommittee is required to be sworn. At this 

time I ask you to please stand and raise your right hand. 

Do you swear the testimony you are about to give before this 

Subcommittee will be the truth, the whole truth, and nothing but 

the truth, so help you, God. 

Mr. WEINSTEIN. Yes. 

Mr. WEINBERGER. Yes. 

Senator COLEMAN. Thank you very much. Mr. Weinstein, we will 

begin with you, followed by Mr. Weinberger. After we’ve heard all 

the testimony, we’ll go to questions. 

As I indicated before, your printed testimony will be in the 

record in its entirety. We’d ask again that you limit your oral testimony to about 5 minutes. And about that time, if you run over 

that, we’ll put up a little note that lets you know that. We’re somewhat flexible in time today, and I think that’s OK with the time 

we have. 

So with that, we will begin, as I said, with Mr. Weinstein. You 

may proceed. 

TESTIMONY OF GARY P. WEINSTEIN,1 VICE PRESIDENT, LEGAL 

AND GOVERNMENT AFFAIRS, JACKSON HEWITT TAX SERVICE, INC., PARSIPPANY, NEW JERSEY 

Mr. WEINSTEIN. Mr. Chairman, I want to thank you for giving 

me the opportunity to testify on behalf of Jackson Hewitt today. 

We welcome and support the Chairman’s interest in, and attention 

to, tax-related financial products. As an industry leader, Jackson 

Hewitt is committed to continuously improving its policies, procedures and disclosures, as well as the products and services we and 

third-party banks offer to best serve our customers, and allow them 

to make fully informed choices about our products and services. 

Our interaction with the Subcommittee’s professional staff prior 

to this afternoon’s hearing, as well as this hearing, are invaluable 

in helping us to continue these efforts. Thus, we are pleased to 

have the opportunity to discuss today our products and services, including those offered by the banks, the comprehensive disclosures 

we provide to our customers, as well as our training of tax preparers and our proprietary software system, all of which are designed to ensure that our customers are receiving full and fairly 

presented description of the information they need to make wellinformed choices about tax-related financial products. 

As part of our ongoing commitment to continue our industry best 

practices, I am pleased today to announce the following actions for 

the 2006 tax season, noting that several of these initiatives have 

been developed as a result of our discussions with the Subcommittee staff under the direction of Senator Coleman. 

First, Jackson Hewitt has eliminated the application fee for Refund Anticipation Loans and other bank products in Jackson HewVerDate 0ct 09 2002 10:15 Aug 04, 2005 Jkt 021431 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 C:\DOCS\21431.TXT SAFFAIRS PsN: PHOGAN
25

itt company-owned locations, and is encouraging our franchisees to 

do the same. 

Second, Jackson Hewitt has sought and obtained the commitment of our banking partners to eliminate the $10 additional finance fee for Refund Anticipation Loans for customers who receive 

an Earned Income Tax Credit. 

Third, Jackson Hewitt has also obtained a commitment of the 

banks that all customers will have the right to cancel a Refund Anticipation Loan within 48 hours. 

Fourth, Jackson Hewitt will be creating a comprehensive tax preparer code of ethics that further solidifies our existing policies, procedures, and expectations of tax preparer conduct. 

Fifth, we will provide our customers with a customer bill of 

rights setting forth Jackson Hewitt’s public commitment to its customers, as well as providing basic information that all customers 

should know. 

Jackson Hewitt Tax Service is the second largest paid tax preparer in the United States. We have over 5,400 locations in 49 

States and the District of Columbia, most of which are franchised. 

In the 2004 tax filing season, Jackson Hewitt prepared approximately 3.1 million tax returns, which accounted for less than 5 percent of the paid tax preparer industry. 

In Minnesota, we have 8 franchisees with 41 locations collectively. Our franchisees are independently owned and operated 

small business entrepreneurs who live in, and employ people from, 

the local communities here in Minnesota, as well as throughout the 

country. For the 2004 tax filing season, these franchisees prepared 

approximately 13,000 tax returns for Minnesotans. 

Jackson Hewitt’s principal business, which accounts for over 70 

percent of our revenues, is the preparation of tax returns. Jackson 

Hewitt electronically files most of the returns it prepares under the 

IRS e-file program. Through e-file, a customer can receive a refund 

directly to their bank account, or receive a check by mail, free of 

charge. This option is always the first choice presented to customers to obtain their refunds. 

In addition, Jackson Hewitt also facilitates the provision of certain financial products offered by two federally regulated banks, 

HSBC Bank USA and Santa Barbara Bank and Trust. In Minnesota, Jackson Hewitt franchises facilitate products offered by 

Santa Barbara. 

Refund Anticipation Loans offered by those banks have been the 

subject of a great deal of discussion today. Banks, not Jackson 

Hewitt, make the lending decisions for a RAL, set the finance 

charge, and make the loan. 

RALs, as loans, provided by banks are subject to numerous Federal laws including the Truth in Lending Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, and Fair Debt Collection 

Practices Act, to ensure that every customer understands the terms 

and conditions of the loans and is treated in a fair, non-discriminatory manner. 

The banks are subject to regulation by the Office of the Comptroller of the Currency, which subjects the bank’s Refund Anticipation Loan business to examination scrutiny. 

26

In addition, States such as Minnesota impose further requirements on disclosures for RALs. Finally, the IRS e-filing process involves registration, and background checks of electronic return 

originators. This is done to provide additional safeguards to taxpayers who utilize authorized e-filers. 

Jackson Hewitt not only complies with all these disclosure requirements, but has implemented its own disclosures over and 

above the Federal and State requirements. Thus, in addition to the 

federally required disclosures of costs and terms that are a part of 

every RAL bank application and the Minnesota State required disclosure, Jackson Hewitt provides a series of disclosures that make 

clear that bank products are not mandatory, that a Refund Anticipation Loan is in fact a loan, and not a refund, and explain the cost 

of the bank products and their alternatives. 

These disclosures include a large type one-page disclosure form, 

acknowledged and signed by the customer, which clearly and simply explains the nature of a Refund Anticipation Loan, sets forth 

the APR for the loans sought, and warns that this APR may be 

high when compared to other sources of credit. 

We have large wall posters in our locations which show refund 

and loan options, as well as the costs and APR associated with six 

example loan amounts. 

We have desk maps on every tax preparer’s desk, facing the customer, setting forth each product and service available at Jackson 

Hewitt, including the ability to transfer the tax return in connection with IRS e-filing at no additional cost. 

And we have prompts embedded in our proprietary decision tree 

computer software which requires our trained tax preparers to 

present timely information to customers about the range of available options. 

Further, we are continuously training our tax preparers, 

franchisees, office managers, and other employees to make sure a 

clear explanation of each product is provided so that a customer always makes the best decision for his or her own situation. 

In furtherance of our ongoing goal of best practices, we applaud 

the Chairman’s efforts that we understand are underway to establish a code of ethics guided by IRS Publication 1345 for the tax 

preparation and tax-related financial products industry. 

Jackson Hewitt will promulgate its own code of ethics guided by 

IRS Publication 1345 regardless of whether this becomes an industry-wide obligation. 

Senator Coleman, I have some continuing remarks, but in the interest of time, if the Subcommittee would like, I can conclude 

or——

Senator COLEMAN. Why don’t you conclude, because I have the 

written remarks, and I will enter them in the record. So if you can 

conclude your oral testimony in the interest of Mr. Weinberger and 

following questions. 

Mr. WEINSTEIN. Thank you, Mr. Chairman. I would, in conclusion, I would like to highlight once more the steps that Jackson 

Hewitt is prepared to take: 

First, we are eliminating the application fee for Refund Anticipation Loans and other banks products at our company-owned locations. We’re encouraging our franchisees to do the same. 

27

1The prepared statement of Mr. Weinberger with an attachment appears in the Appendix on 

page 161. 

We have sought and obtained the agreement of our banking part- ners to eliminate the $10 additional finance fee for Refund Anticipation Loans for customers who receive EITC. We’ve obtained commitment of the banks to allow 48-hour right of recisions. 

We will be creating a comprehensive tax preparer code of ethics, 

and we will be establishing a bill of rights. 

Mr. Chairman, thank you for the opportunity to testify. 

Senator COLEMAN. Thank you very much, Mr. Weinstein. Mr. 

Weinberger. 

TESTIMONY OF ROBERT A. WEINBERGER,1 VICE PRESIDENT, 

GOVERNMENT RELATIONS, H&R BLOCK, KANSAS CITY, KANSAS 

Mr. WEINBERGER. Thank you, Mr. Chairman, for the opportunity 

to appear. 

Today H&R Block is closing out its 50th tax season as the Nation’s largest tax return preparer. Over the last few weeks, 167,000 

Block associates at 11,000 offices across America have helped prepare returns for almost 20 million Americans. 

Here in Minnesota, 1,400 dedicated Block employees will help 

nearly a quarter million residents navigate the complexities of the 

tax code, claim their refunds, and importantly for us at H&R Block, 

get advice they need to improve the financial lives of their families. 

Still other Minnesotans are using H&R Block’s free online filing 

program in the Free File Alliance with the IRS. 

We’re proud of that 50-year history. We continue to evolve and 

improve to meet the needs of our clients. From a background in 

simply ‘‘doing people’s taxes,’’ we’re evolving into a ‘‘tax and financial partner’’ to our clients, providing not only tax services and advice, but also new financial products, like low-cost retirement savings, transaction accounts, and home mortgages. 

Our focus is that client partnership. We succeed only when we 

earn the trust that keeps clients coming back year after year, as 

over 70 percent do. 

The title of this hearing is ‘‘Tax-Related Financial Products Can 

Be Costly.’’ It could just as easily have been ‘‘Tax-Related Financial 

Products Can Be Beneficial.’’

Of course there are costs for our products and services. Indeed, 

one reason we were founded was to offer middle American consumers lower cost alternatives to CPAs and attorneys in helping to 

prepare complex tax returns. 

If we didn’t charge fair prices for our services, we wouldn’t stay 

in business. But while there are costs, tax-related financial products also have benefits. And consumers who use them find the benefits outweigh the costs and represent good value. 

Let me briefly highlight four products. 

First, Refund Anticipation Loans. Refund Anticipation Loans cost 

money, sometimes more than other kinds of credit. In our offices 

they cost between $29.95 and $109.95 for bank loans that range 

from $200 to $10,000. But they also provide added speed, convenience and security. 

28

Many consumers are financially stressed, especially at tax time, 

facing overdue holiday and heating bills, threats from creditors and 

medical or other emergencies. They often can’t afford to wait the 

2 to 8 weeks it takes the IRS to deliver a refund. Half of our RAL 

consumers don’t have a checking account, so can’t take advantage 

of the speed of IRS direct deposit. 

RALs are not right for all taxpayers and, indeed, eight out of ten 

Block clients don’t use them. But those who need the product see 

it as a solution, not a problem, and it can represent a life-line for 

those in need. 

To ensure informed choice, all options are presented, including 

free IRS delivery options presented first, in disclosures developed 

with the help of the former head of the Bureau of Consumer Protection of the Federal Trade Commission and after consultation 

with consumer groups. 

A second product is Peace of Mind, an extension of our Standard 

Guarantee, which costs $27. What many of our customers see are: 

The benefits of professional representation in case of an IRS audit; 

the security of knowing that if we made an error, we will pay up 

to $5,000 in taxes owed as a result; and, quite literally, additional 

‘‘peace of mind,’’ in contrast to anxiety as many taxpayers see the 

tax collector as not entirely benign. 

A third product is our express IRA. While it costs $15 to set up, 

this savings account has enabled thousands of taxpayers to save for 

retirement, many for the first time. Given an average refund of 

$2,100, tax time can be a teachable moment to help Americans 

save and take advantage of the incentives Congress has enacted to 

better their lives, including the little-known Retirement Savers 

Credit which partially matches IRA contributions. We are proud to 

have helped secure that credit for nearly a quarter of all those in 

America who claimed it in the last 2 years. 

Finally let me mention one product, the H&R Block Advantage, 

that doesn’t cost our clients an extra dime. The Block Advantage 

statement contains actionable financial and tax advice tailored to 

each client’s unique situation. We use it to connect people to government benefits for which they may be eligible but not receive, including food stamps, children’s health insurance, and prescription 

drug discounts. 

We know from food stamp officials that calls to their hotline 

‘‘skyrocketed’’ by over 300 percent when we first began our efforts. 

Mr. Chairman, our focus as a company is ‘‘client first.’’ Providing 

sound advice, not pushing products that are not in the best interest 

of our clients. That is a clear message from management and embedded in our culture. We are a value-driven and not a sales-driven 

company. 

Inevitably, we will not always get it right. But our shortcomings 

are those at execution, not intent. 

Mobilizing a field force of 167,000 people for a 3-month tax Olympiad is challenging, and not all of our 20 million clients will be 

happy with the services they receive. But our aspiration, and we 

hope our achievement, is to earn the respect of our clients, and to 

continually improve our training and compliance, our policies and 

procedures, to make our product offerings transparent and fair, and 

29

1See Exhibit No. 12, which appears in the Appendix on page 192. 

to ensure that our clients can make an informed choice about all 

of them. 

Our success comes from repeat business. Our interest, therefore, 

is in meeting our client’s needs, adding value to their lives, and 

earning their trust, not selling products they don’t need. If we do 

that, they won’t come back, and we won’t succeed. 

Mr. Chairman, thank you again for the opportunity to appear. 

We look forward to answering your specific questions, and commenting on the previous panelists. 

Senator COLEMAN. Thank you very much, Mr. Weinberger. Gentlemen, let me say a positive, as I said earlier, I want to particularly thank Jackson Hewitt for the cooperation we’ve received. It’s 

certainly taking strong steps in the right direction. 

Mr. Weinberger, I will note, speaking with my staff, that your 

written disclosures are exceptional, and you outlined that in your 

testimony. I still think there is some room to bring verbal disclosure up to that same level, and I would hope that the end result 

of this hearing there would be some focus of discussion on that and 

how that can be achieved. But clearly as we’ve looked at the written disclosures, they certainly are well done. 

A couple questions, though. One, you mentioned, if I may, talking 

about RALs are not right for all taxpayers, and eight of ten don’t 

use them. What percentage of folks who are eligible for the EITC, 

how many filers of EITC use RALs? 

Mr. WEINBERGER. I don’t know, Mr. Chairman. But I do know 

any client who comes into an H&R Block office that’s eligible for 

the EITC will get it. And except for the existence of commercial tax 

return preparers, millions of Americans wouldn’t get the EITC, let 

alone the full value of the EITC to which they’re entitled. H&R 

Black alone does 24 percent of all EITCs in America. 

Senator COLEMAN. Would you supply for the Subcommittee, see 

if you can get an answer to that question, what percentage of folks 

who file EITC also take out RALs? It would be very helpful. 

Mr. WEINBERGER. I will.1

Senator COLEMAN. Mr. Weinstein, I notice in your testimony that 

you did approximately 13,000 returns of Minnesotans and facilitated approximately 4,000 RALs. Do you know what percentage of 

those folks who are eligible for EITC also filed RALs? 

Mr. WEINSTEIN. I do not have that information now, Mr. Chairman, but I would be happy to get back to the Subcommittee. 

Senator COLEMAN. That would be helpful. Also, Mr. Weinstein, 

just so I understand the relationship between the banks and the 

tax preparers, the RALs, they’re bank loans. They’re not Jackson 

Hewitt or H&R Block. 

But do you have a relationship, questions for both gentlemen, 

one, do you get any refunds or do you have any financial relationship with banks whereby you benefit to the number two question, 

the number of RALs done? 

And second, do you have any interest in RALs themselves, almost acting as a bank itself? Do you have any control or ownership 

over RALs? Mr. Weinstein and Mr. Weinberger. 

30

Mr. WEINSTEIN. Mr. Chairman, may I take the questions in reverse order? 

Senator COLEMAN. Please. 

Mr. WEINSTEIN. The second question relating to incentives, incentives to sell RALs. In our company-owned stores we do not have 

any incentives for tax preparers to sell RALs. In fact, we’re not 

even aware of any of our franchisees who have similar incentives. 

I would ask that the Subcommittee keep in mind the application 

fee that is charged, regardless of whether the customer receives a 

RAL or an ACR or an ADD, remains the same. There is truly no 

financial incentive to direct a customer to one product or the other. 

And finally, the decision is, and has to be, the customers based 

on their own individual financial needs. 

Senator COLEMAN. But my question went to whether you have 

any relationship with the banks, not incentives from preparer to 

client; in other words, if the preparer is going to get more money. 

But do you have a relationship with the banks? Obviously you’re 

directing a lot of business to them, substantial business. Is there 

a financial relationship with the banks whereby there’s a benefit 

for the company for the volume of RALs produced? 

Mr. WEINSTEIN. Mr. Coleman, this is perhaps getting to your 

first question. We do have a relationship with two banks, as I explained in my written testimony and my oral testimony, Santa Barbara Bank and Trust and HSBC. 

We earn a flat fee from the bank on RALs. We have a sharing 

provision that relates to the delinquency and loss arrangement, but 

this provision will likely not come into play because in the 2005 tax 

season we do not have a delinquency and loss amount that would 

trigger the implementation of this provision. 

We understand the concerns that have been raised here, and we 

certainly will consider those. 

Senator COLEMAN. Mr. Weinberger, do you have a relationship 

with the banks by which you get some financial return based on 

the amount and volume of RALs? 

Mr. WEINBERGER. Yes. We have a 10-year contract that was entered into in 1996 with Beneficial Bank, now succeeded by HSBC 

Bank Corporation, in which we purchased an interest in the refund 

loans that they make for H&R Block clients. 

Senator COLEMAN. Do you know what H&R Block earned last 

year from rebates, refunds, and incentives for selling RALs? 

Mr. WEINBERGER. Well, I know what we received in participation 

fees, which is in our annual report. 

My recollection, which I hope would be subject to correction, 

would be about $160 million in revenue. 

Senator COLEMAN. I think my notes indicate about $168 million 

in revenue. 

The other question, you talked about Peace of Mind. And we 

noted, Mr. Eckelberry, that in part of his evaluation, the Peace of 

Mind product was one of those things he was evaluated on. And 

you’ve indicated that there is some value to that. 

My question, though, is in the value if someone is audited, if 

there’s a mistake or something, it’s on your shoulders and not on 

the taxpayer’s. What percentage of Earned Income Tax Credit clients were audited last year? 

31

1See Exhibit No. 12, which appears in the Appendix on page 192. 

Mr. WEINBERGER. About three or four times the number of middle class taxpayers. So it is a group that is subject to elevated scrutiny and examination by the IRS. 

Senator COLEMAN. Do you know the percentage of filers, the 

number of folks subject to audits of your customers? 

Mr. WEINBERGER. I can get it for you.1

Senator COLEMAN. Could you give me a ballpark figure? Is it 

under 5 percent? 

Mr. WEINBERGER. Well, it’s under 5 percent. But the average for 

middle class taxpayers would be considerably lower. 

Senator COLEMAN. Is it under 3 percent? 

Mr. WEINBERGER. I don’t have the exact percentage. 

Senator COLEMAN. Obviously, my concern is that if 97 percent to 

98 percent of folks don’t have a risk here, that if in fact you’re selling a product, pushing a product, and evaluating performance on 

the basis of that product, then in the end, 90-something percent, 

and I am quite confident it’s over 95, and could go I think higher 

than that, that raises the kind of questions that were raised by the 

prior panel, that you have folks who are low-income, obviously 

stressed, as you indicated. The IRS could be a big bogeyman in 

terms of fear of an audit. But if you walked in and said you had 

a 99 percent chance you’re not going to be audited, you want to buy 

this product, it’s a different response than giving Peace of Mind 

and it’s going to cost you for this. 

Mr. WEINBERGER. Well, the IRS has a well-publicized enforcement campaign, and especially so with respect to the EITC where 

Congress has actually appropriated funds for EITC enforcement as 

a separate line item. And the Congress has put a considerable 

amount of pressure on the IRS because of the large amount of noncompliance in the EITC program. 

There is a rational reason for people being concerned about 

audit, but there’s also an emotional element which relates to perceptions. And I think that’s a reality in America. 

Senator COLEMAN. Again for the record, if you could provide us 

with a percentage of the EITC clients audited last year, that would 

be——

Mr. WEINBERGER. We would not necessarily know which of our 

clients is audited. 

Senator COLEMAN. What percentage of those who bought Peace 

of Mind were audited, I would like that information. Those who 

purchased that policy, what percent of EITC actually used that policy. I think that would be useful information to have. 

Mr. WEINBERGER. OK.1

Senator COLEMAN. So I understand the relationship between the 

companies and the franchises. Mr. Weinberger, you talked about 

eliminating the application fee—excuse me. Mr. Weinstein, you 

eliminated application fees and which you encourage franchisees to 

do that. What does that mean? What kind of encouragement do you 

offer, what kind of control do you have over the actions of the franchise operations when it comes to fees they charge or don’t charge? 

And, Mr. Weinberger, I’d ask the same question. 

32

Mr. WEINSTEIN. Thank you, Mr. Chairman. Jackson Hewitt is a 

franchise model, which means that franchisees make up the backbone of our tax preparation business. Each franchisee is an independently owned and operated small businessman and woman, and 

thus is able to competitively price their products. 

We have company-owned stores in addition to our franchise 

stores. Out of the 5,400 stores we have, the vast majority of them 

are franchise-owned. 

Senator COLEMAN. If I may interrupt. In Minnesota, what percentage are franchise operations and what percentage are company-owned? 

Mr. WEINSTEIN. One hundred percent franchise-owned. 

Senator COLEMAN. So Minnesota franchise operations, talk to me 

about, if you eliminate application fees, how does that impact operations in Minnesota? 

Mr. WEINSTEIN. Well, in fact, we have at the company-owned 

store level decided to begin to reduce and eliminate application fees 

this tax season, and we plan to completely eliminate application 

fees next tax season in our company-owned stores. 

Our franchisees, who may very well follow us in this approach, 

and as I stated in my opening statement, we will encourage them 

to follow us in that approach, will begin to reduce or eliminate the 

application fee in Minnesota for tax season 2006. And I believe that 

various franchisees across the country have already begun this 

process. 

Senator COLEMAN. I’m just trying to understand the nature of 

your ability to encourage your franchises. Do you have any control, 

do you have any saying, do you have anything within the relationship between you and the franchise operation that would provide 

that application fees are eliminated, or in fact is it simply up to the 

franchise operation to do what they wish to do, understanding that 

the company may encourage a certain course of action? 

Mr. WEINSTEIN. As a franchiser, we cannot force the franchisee 

to take any particular action. But given the competitive landscape, 

the legislative landscape, and the regulatory landscape, we fully expect that our franchisees will follow us in our strong efforts to 

eliminate this application fee. 

Senator COLEMAN. Mr. Weinberger. 

Mr. WEINBERGER. H&R Block has already eliminated what it 

called a ‘‘system administration fee’’ in its company-owned offices 

throughout America. 

In Minnesota, we have 112 company-owned offices and 93 franchised offices. There is no fee in the company-owned offices or in 

two-thirds of the franchise offices. In the remaining third, there is 

a $13 fee, which will be eliminated entirely next year. 

Senator COLEMAN. When you say eliminated, do you have the 

ability to have them eliminate it or is this simply voluntary action 

on the part of a franchisee in standing with the company’s strongly 

recommending certain policy? 

Mr. WEINBERGER. I don’t know the answer to that, but I’ve been 

assured the small number of remaining ones will be eliminated. 

Senator COLEMAN. I want to just go back to the testimony of Ms. 

Burbach. And I think it fairly typical, an average individual, financially strapped, came in, somewhat confused. I presume she had in 

33

1See attachment to Mr. Weinberger’s statement which appears in the Appendix on page 167. 

front of her perhaps even verbal language—not verbal, written disclosures, etc. 

One, as you kind of look at that individual, does it surprise you 

that she was confused? Do you think that her situation was unusual for someone in that position? 

Mr. WEINBERGER. Well, first let me say I feel bad about the circumstances that she described, and she was clearly stressed. And 

both I and the company regret that. 

We have a dilemma here because the tax code is quite explicit 

about not allowing us to discuss a person’s tax return without their 

specific written consent for each use or disclosure. If she provides 

that consent, I would be happy to share, privately, with her permission and the opportunity to review it, the circumstances as best 

we can establish them. 

Senator COLEMAN. Would it be your testimony, though, that you 

are fairly confident that your tax preparers do explain that folks 

have the opportunity to cancel RALs within a couple days if they 

so desire? 

Mr. WEINBERGER. Yes. And I can speak to that, Mr. Chairman. 

We have considerably revamped over the last few years our training and compliance activities in this area. 

The tax return preparer who testified earlier, Mr. Eckelberry, 

last worked for H&R Block for a full year in the year 2000, 5 years 

ago. During the intervening time, a considerable amount of change 

has occurred. 

Tax clients who have a refund are fully—all of their options are 

explained to them. They receive a ‘‘Facts About RALs’’ document, 

which, by the way, does indicate that we may purchase an interest 

in the refund loan, which is disclosed, and which also specifically 

says that you can cancel your RAL transaction for up to 48 hours 

without being obligated for a finance charge connected with it. And 

I have blow-ups of those if it would be easier to illustrate. 

Senator COLEMAN. Can we have that entered into the record?1

Mr. WEINBERGER. We have worked with the former head of the 

Federal Trade Commission Bureau of Consumer Protection, and developed what we think are really best practices, and that is several 

layers of disclosure. 

First, in the welcoming brochure, the refund or settlement options are fully described, again with the IRS free options described 

first. 

Second, at the tax desk there is the ‘‘Facts About RALs’’ document, which on the reverse side has a chart showing the price of 

RALs and the annual percentage interest rate for various amounts, 

the time line of refund times from the IRS versus the time for bank 

products, and a run-through of a typical transaction so a client can 

see what is deducted and what the bottom line would be. 

Third, embedded in the computer program is a side-by-side comparison of all options, which takes the general information and 

makes it specific to the individual taxpayer, what their refund is 

and what any of the items will cost. 

Fourth, there’s an extensive written application which contains 

various cautions in it, and further disclosures required under the 

34

Trade in Lending Act which are included in the signed loan agreement. 

And finally, then at the end of the process, is a Block Advantage 

Report. The first item included for people who use RALs is an indication of—and I will read it to the Subcommittee: 

‘‘Plan to keep more of your refund next year: A Refund Anticipation Loan is fast and easy, but it’s also expensive because the lending bank charges you for this service. In addition, other institutions 

may charge you to cash your RAL check. Next year, why not file 

electronically and ask for your refund by direct deposit or IRS 

check? That way you can avoid RAL fees and still get your money 

in approximately 8 to 15 days by direct deposit, or 3 weeks via 

check. If you don’t have a bank account, many banks, savings institutions and credit unions have low-cost solutions available. You’ll 

gain better control of your finances, avoid check-cashing fees, and 

keep more of your refund in your own pocket.’’

So we’ve tried, I think, responsibly and ethically, to offer full disclosures of all options, and we believe this should enable a potential consumer of RALs to be fully informed before he or she makes 

a choice. 

Senator COLEMAN. And my concern, and I appreciate this, as I 

started this panel, with making progress, both certainly, even as 

we’ve approached this hearing and have historically looked back on 

what H&R Block has done, I continue to be troubled by a number 

of things here. 

One, that in effect, Mr. Weinberger, you are the lending bank. 

And you’ve got an interest in these loans. And I’m trying to think 

of some other client, patient-client situation where you have a financial interest in your client buying a product that has a very expensive product, may be more expensive than some other options 

that are out there, and you financially benefiting from that. I’m 

trying to understand. 

And we’ll talk to the IRS about this situation where you have 

this kind of sacred trust, but in effect you are the lending bank 

today by your interest in the RALs themselves. And I find that concerning. I’m not sure where we go with it. 

But as I kind of listen to this, the disclosure to there, one of the 

critical things is you’ve got a direct stake and a financial interest 

in folks buying a product that has an extraordinarily high interest 

rate, a cost in relationship to the benefit the person gets. 

And I’m searching for some other analogies in law, in medicine, 

in accounting where that exists and how you deal with what appears to me to be a conflict. 

Mr. WEINBERGER. Well, several points in response. First, that we 

may purchase a loan is disclosed to the consumer. 

Second, we’re not the lending bank, although we purchase an interest in the loans. 

Third, if the company—and I’m not sure if it’s fair, but if the 

company has an interest in the product succeeding, that doesn’t 

necessarily apply to the individual tax return preparer who does 

not receive any financial incentive whatsoever for offering a RAL 

or a RAC. And so at the street level where the contact is with the 

taxpayer, there is no financial incentive to offer the product. 

35

And in fact, given Mr. Eckelberry’s earlier testimony, I would 

like permission to enter into the record our performance evaluation 

discussion sheet, which is currently in use, which I think again illustrates that we are a values-driven rather than a sales-driven 

culture at H&R Block. And we make it very clear that our return 

preparer’s first obligation is to do right by the taxpayer. And I 

think that’s very strongly the emphasis of the company. 

Senator COLEMAN. Mr. Weinstein, do you want to add to that response? 

Mr. WEINSTEIN. I think that it’s very important for Jackson Hewitt to have satisfied customers. And to the extent that we have 

taken great pains to make sure that our tax preparers are trained 

adequately (and I think we heard some testimony today from Ms. 

Grant which may support that), and to the extent that we can provide clear disclosure that is understood by the customer, that is a 

good thing for Jackson Hewitt. We want to retain these customers, 

we want them to return to our stores. 

Senator COLEMAN. Gentlemen, first, we will make sure that document is entered into the record. 

I do want to thank you for your testimony. And this Subcommittee will certainly continue to work with you on these issues. 

So thank you very much. 

With that, this hearing is adjourned. 

[Whereupon, at 2:52 p.m., the Subcommittee was adjourned.] 

(37)

A P P E N D I X 


21431.001
38


21431.002
39


21431.003
40


21431.004
41


21431.005
42


21431.006
43


21431.007
44


21431.008
45


21431.009
46


21431.010
47


21431.011
48


21431.012
49


21431.013
50


21431.014
51


21431.015
52


21431.016
53


21431.017
54


21431.018
55


21431.019
56


21431.020
57


21431.021
58


21431.022
59


21431.023
60


21431.024
61


21431.025
62


21431.026
63


21431.027
64


21431.028
65


21431.029
66


21431.030
67


21431.031
68


21431.032
69


21431.033
70


21431.034
71


21431.035
72


21431.036
73


21431.037
74


21431.038
75


21431.039
76


21431.040
77


21431.041
78


21431.042
79


21431.043
80


21431.044
81


21431.045
82


21431.046
83


21431.047
84


21431.048
85


21431.049
86


21431.050
87


21431.051
88


21431.052
89


21431.053
90


21431.054
91


21431.055
92


21431.056
93


21431.057
94


21431.058
95


21431.059
96


21431.060
97


21431.061
98


21431.062
99


21431.063
100


21431.064
101


21431.065
102


21431.066
103


21431.067
104


21431.068
105


21431.069
106


21431.070
107


21431.071
108


21431.072
109


21431.073
110


21431.074
111


21431.075
112


21431.076
113


21431.077
114


21431.078
115


21431.079
116


21431.080
117


21431.081
118


21431.082
119


21431.083
120


21431.084
121


21431.085
122


21431.086
123


21431.087
124


21431.088
125


21431.089
126


21431.090
127


21431.091
128


21431.092
129


21431.093
130


21431.094
131


21431.095
132


21431.096
133


21431.097
134


21431.098
135


21431.099
136


21431.100
137


21431.101
138


21431.102
139


21431.103
140


21431.104
141


21431.105
142


21431.106
143


21431.107
144


21431.108
145


21431.109
146


21431.110
147


21431.111
148


21431.112
149


21431.113
150


21431.114
151


21431.115
152


21431.116
153


21431.117
154


21431.118
155


21431.119
156


21431.120
157


21431.121
158


21431.122
159


21431.123
160


21431.124
161


21431.125
162


21431.126
163


21431.127
164


21431.128
165


21431.129
166


21431.130
167


21431.131
168


21431.132
169


21431.133
170


21431.134
171


21431.135
172


21431.136
173


21431.137
174


21431.138
175


21431.139
176


21431.140
177


21431.141
178


21431.142
179


21431.143
180


21431.144
181


21431.145
182


21431.146
183


21431.147
184


21431.148
185


21431.149
186


21431.150
187


21431.151
188


21431.152
189


21431.153
190


21431.154
191


21431.155
192


21431.156
193


21431.157
194


21431.158
195


21431.159
196


21431.160
197


21431.161
198


21431.162
199


21431.163
200


21431.164
201


21431.165
202


21431.166
203


21431.167
204


21431.168
205


21431.169
206


21431.170
207


21431.171
208


21431.172
209


21431.173
210


21431.174
211


21431.175
212


21431.176
213


21431.177
214


21431.178
215


21431.179
216


21431.180
217

Æ


21431.181