What's a Refund Anticipation Loan or RAL?

A Refund Anticipation Loan (RAL), as its name implies, is a Loan made to a taxpayer by a bank in anticipation of a refund.  The tax preparer is considered the loan agent and is responsible for handling the loan agreement between the taxpayer and the bank.  Once it has been confirmed that a taxpayer is entitled to a refund, the bank authorizes the tax preparer to issue a check to the taxpayer.  The amount of the check the taxpayer receives is typically equivalent to the amount of the refund the taxpayer is expecting, less any tax preparation fees, processing charges, and interest charged by the bank.