At the Car-Mart in Rogers, Arkansas, or at 150 other Car-Mart locations nationwide, you can both buy a used car and get your taxes done. If that sounds like an unusual combination, it’s not. According to Car-Mart’s website, the used car dealership offers onsite tax preparation services through Tax Max, a Tampa-based company that works with a jaw-dropping 3,000 car dealerships across the country. Tax Max also works with money services businesses (such as check cashers), collections companies, and even mobile home dealers to help them capture a chunk of their customers’ tax refunds. This might be convenient for some, but it is very costly.
The Rogers Car-Mart, for instance, charges $149 to prepare a federal tax return, plus $49 for the state return, according to a salesperson I spoke with when I called recently. I’d also pay a $93 “bank fee” if I got a refund, plus a $27 “check printing fee” if I wanted an advance on my money instead of waiting for the IRS to cut the check. “So that would be a total of $318,” the clerk told me. That’s equal to 15 percent of this year’s average federal refund of $2,201.
And companies don’t just benefit from receiving a cut of these high fees when they partner with a tax preparer like Tax Max. (Auto dealers, for instance, can charge a $99 “dealership incentive fee” for every return they process.) A car dealership or another business can secure part or all of the tax refund itself. “We prepare your customer’s tax return, but your location receives the refund,” boasts the Tax Max site pitch to prospective partners. “This refund can be used for a down payment on a car and/or car insurance. This refund can also be used to collect on past-due obligations by a collection company. The refund may also be used as a down payment for a manufactured home. Some companies can generate revenue by cashing the checks.”