RALs are mostly marketed to low-income taxpayers. In accordance with IRS data, 92% of taxpayers whom sent applications for a RAL this year had been low-income. 31 Research from the Urban Institute discovered that the median modified income that is gross of 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 study discovered that “taxpayers surviving in excessively communities that are low-income an astonishing 560 per cent prone to utilize RALs and 215 percent very likely to use RACs—controlling for his or her family members traits and their earnings. ”33 Put another way, RAL users are usually not only bad; they reside in bad communities. The writers associated with research theorized that this sensation could possibly be because of targeting by income tax planning chains, especially in keeping of shop areas, or due to“peer that is significant. ”34
Probably the most most likely RAL users are recipients regarding the Earned Income Tax Credit (EITC).