This is an updated version of an earlier post.
Connecticut’s income-tax collector is threatening to block Walmart’s offer to cash shoppers’ tax refund checks, and says its coziness with some major tax preparers may be a problem.
Department of Revenue Services Commissioner Kevin Sullivan said Wednesday that income tax check cashing being offered at some Walmart stores for the first time this year is “just a way to lure taxpayers into spending at Walmart the minute they get their hard-earned refunds.”
Sullivan said Walmart’s “Direct2Cash” marketing promotion targets low and middle income taxpayers – especially those receiving federal and state Earned Income Tax credits. For an additional $7 fee at the time of tax preparation and filing, refunds are directed to Wal-Mart’s “banking” partners instead of being mailed directly to taxpayers.
“It’s welcome to Wal-Mart and good-bye refund,’’ he said. “While pretending to help otherwise bankless taxpayers, Walmart is really just helping itself to turn tax refunds into immediate store sales.”
Sullivan has asked his legal and audit staff to contact Wal-Mart in order to determine if this is happening in Connecticut and, if so, under what terms and conditions. He said he may also ask the Connecticut Attorney General’s office, as well as the state Department of Banking and Department of Consumer Protection for assistance.
A Walmart spokeswoman said Thursday that the retailer has reached out to Sullivan to discuss his concerns.
An agency spokeswoman confirmed Thursday that a meeting is being set up between the commissioner and Walmart officials.
Walmart has made a deal with Green Dot Corp. and with Republic Bank & Trust Co. so that it can cash in on taxpayer refunds of up to $7,500, Sullivan said, citing the retailer’s promotion on its homepage.
He noted that commercial tax preparer Jackson Hewitt already contracts with Walmart to sell tax preparation centers at store sites, including the tie-in of a $50 Walmart gift card.
Walmart requires taxpayers to have a “confirmation code” to pick up their refund. Some codes expire in as little as two weeks, which requires taxpayers to return to their preparer and arrange a different refund method.
“This is just one more reason why the Department of Revenue Services will also be examining standards and practices for tax preparers,” he said.
