RALs are typically marketed to taxpayers that are low-income. In accordance with IRS information, 92% of taxpayers who sent applications for a RAL this year had been low-income. 31 A report through the Urban Institute discovered that the median adjusted revenues of RAL borrowers is under $20,000, and that one in four taxpayers making $10,000 to $25,000 make use of a RAL. 32 In reality, this research unearthed that “taxpayers surviving in acutely low-income communities are an astonishing 560 percent very likely to utilize RALs and 215 per cent very likely to use RACs—controlling due to their family members faculties and their income. ”33 Put simply, RAL users are usually not only bad; they reside in bad communities. The writers regarding the research theorized that this trend could possibly be because of focusing on by income tax planning chains, especially in keeping of shop places, or due to“peer that is significant. ”34
The absolute most most likely RAL users are recipients of this Earned Income Tax Credit (EITC). RALs empty a huge selection of vast amounts from that system every year. IRS information suggests that in 2010 almost two-thirds (66%) of RAL customers had been EITC recipients, or 3.4 million families. 35 Yet EITC recipients constructed just 20% of specific taxpayers this year. 36 Therefore, EITC recipients are greatly over-represented one of the ranks of RAL consumers.