IRS to end release of taxpayer debt information; will make loans against refunds harder to get

IRS to end release of taxpayer debt information

NEW YORK — The Internal Revenue Service says it will end its policy of releasing information about back taxes and other debts owed by taxpayers when returns are filed in the coming tax season.

The information, called debt indicator codes, can serve as a warning that some or all of the person’s refund might be held back to cover old debt. They are typically used by tax preparers to decide if a taxpayer can get a refund anticipation loan.

These short-term loans have been criticized by consumer advocates as charging high interest rates for providing access to money just a few days before taxpayers can get their refunds from the IRS with electronically filed returns.