Starting with next year’s tax filing season the IRS will stop the practice of providing the figure, which is kept by the agency to track whether an individual taxpayer has any delinquent tax debts or other obligations that are subject to the Treasury refund offset program.
"We no longer see a need for the debt indicator in a world where we can process a tax return and deliver a refund in 10 days,” IRS Commissioner Doug Shulman said in a statement. "We encourage taxpayers to use e-file with direct deposit so they can get their refunds in just a few days."
The privacy of taxpayers will be better protected and "more taxpayers will keep their tax refunds where they belong, in their own pockets,” Baucus said.
Shulman said RAL loans are often targeted at lower-income taxpayers, but with e-file and direct deposit, they have other ways to quickly access their money.