High interest “tax refund anticipation” loans are popular with many people who need money fast. But they are most popular with people living on 4 Indian reservations in South Dakota.

Some of these loans are taken out prior to even preparing tax returns, in December, and based on paycheck stub information which they use to calculate the anticipated refund. Many use this as a way to get extra money for Christmas and later must go back and pay the preparer up to $150 additional to file their taxes.

The IRS has decided to block tax preparers who offer free services through the IRS Free File program from offering refund anticipation loans, but the same tax preparers offer them at their branch offices.

Tax refund anticipation loans popular on state’s reservations

According to the IRS, about 30 percent of early filers did not ask for the telephone tax refund, and almost half of those omissions were made by paid tax preparers.

“We are surprised how many tax preparers are overlooking the telephone tax refund,” IRS Commissioner Mark W. Everson said. “We want all taxpayers entitled to this refund to get it, whether they are using a tax preparer or doing the return themselves.”

The Internal Revenue Service today urged taxpayers to check to see if they qualify for the telephone excise tax refund after more than 10 million early filers did not request the one-time refund. For people requesting the telephone tax refund, it adds $30 to $60 — or even more — onto a refund.

For information and help on requesting the telephone tax refund, visit the IRS website.

Here’s a way to make good on that New Year’s resolution to save money with a little help from the IRS. This year the IRS is offering to split your refund among two or three checking or savings accounts when you use direct deposit.

If you are due a refund, simply file IRS’ Form 8888, Direct Deposit of Refund to More Than One Account, to divide your refund among two or three different accounts. You can specify how much of the refund you want sent to each account. The amount sent to any one account must be at least $1.

If you are filing a joint return, the IRS will deposit it to a joint account or one held in either filer’s name but check with your bank to make sure they will accept a joint refund deposit to an individual account.

You can still elect to have your refund deposited to a single account by filling out the direct deposit lines on your form 1040 or 1040a. You need file a separate form 8888 if you wish to split the deposit among two or three accounts.

So why not earmark part of your refund for your savings account this year? It might be a great boost to start saving in 2007.

For more information on splitting your direct deposit refund see the FAQ page at the IRS website.

The IRS estimates that 25% of taxpayers who are eligible for the Earned Income Tax Credit fail to claim it. The EITC was created in 1975 to offset the burden of Social Security taxes and to serve as a work incentive. The amount of the credit varies but it is generally determined by income and family size.

A taxpayer may be able to take the credit for tax year 2006 if the taxpayer:

* has more than one qualifying child and earns less than $36,348 ($38,348 if married filing jointly),

* has one qualifying child and earns less than $32,001 ($34,001 if married filing jointly), or

* does not have a qualifying child and earns less than $12,120 ($14,120 if married filing jointly).

To help taxpayers and tax preparers to determine eligibility for the EITC, the IRS has an interactive tool, the EITC Assistant. Basically if the EITC exceeds the amount of taxes owed, then a refund is due. You may be eligible for the Earned Income Tax Credit even if you didn’t earn enough income to be required to file a return. But if you do qualify, you will have to file to receive your refund.