The IRS introduced a rule change Friday for next year, eliminating the debt indicator, which is commonly used by refund anticipation lenders to calculate the amount of a taxpayer's refund.

In a press release, IRS Commissioner Doug Shulman said advances in the department's capabilities made the debt indicator outdated.

"As we prepare for tax season every year, we look at past practices and consider whether they still make sense," he said. "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. We encourage taxpayers to use e-file with direct deposit so they can get their refunds in just a few days."

Refund Anticipation Loans (RAL's) haven't been eliminated by the IRS, but lenders may now be more reluctant to offer them because they won't know if a taxpayer owes the IRS.

Federal tax debts are typically taken from returns by the agency.

Now, the way of doing business will change, according to Peter Skillern of the Community Reinvestment Association of North Carolina. He said more speculative lenders may enter the fray.

"Currently, all RAL's are made by banks that have safety and soundness regulations," Skillern said. "A question is what the response of the bank regulators will be to having banks make loans without sufficient underwriting, i.e. the debt indicator. If the bank regulators say RAL's are permissible, but not RAL's without the debt indicator, RAL's will not be made by banks."

Non-bank, or consumer finance, lenders typically charge higher rates of interest, but will be subject to state law which sets the maximum interest rate on a loan at a 36 percent a year.

Richmond County tax preparers could feel the pinch, according to Liberty Tax Service of Rockingham Owner Tammy Bates, who said the rule change will mean a higher rate of turndowns among those who apply for the loans.

"I think it will hurt us just a little bit because we have so many customers that want money now because the economy is so bad," she said. "We don't have any hand in what the bank does, but I don't know if customers will understand that."

In his own press release, Liberty Tax Founder and CEO John Hewitt decried the rule change, saying the fees charged to those who are approved for one of the loans will be considerably higher because of the increased risk to lenders.

"It's a disappointing decision for consumers," Hewitt said. "The demand for Refund Anticipation Loans is customer-driven. We are emerging from the greatest financial downturn since the Great Depression. This really isn't the time to take financial options away from those who choose them, and more importantly need them."

However, Skillern pointed out a silver lining in the situation.

"The upside is that tax filers will get their refunds without paying high cost RAL fees," he said. "It takes about 10 days to receive the refund. The standard interest rate for RAL's is 36 percent interest, but junk fees have increased the cost of RAL's considerably."

The 36 percent interest rate coincides with the state's threshold for how much can be charged on a loan.

The IRS release said more than 95 million tax returns were filed using e-file so far this year, or more than 70 percent of the total returns.

"Refund Anticipation Loans are often targeted at lower-income taxpayers," Shulman said. "With e-file and direct deposit, these taxpayers now have other ways to quickly access their cash."

Tax Professional Tommy Warren of Warren Accounting and Tax Service said there are certain services a professional provides that could be missed by a layman preparing an online return.

"I know a lot of people are doing the online returns, and if the information your viewing online includes what is new for this year and things like, 'This will give you a $1,500 deduction,' it shouldn't make that much of a difference," he said. "A professional would know what new things are available to you, and could probably point out some things you'd want to do in the future to get a larger return."

Those anticipating a tax return will still be able to access information about their returns through the "Where's My Refund?" service on the agency's Web site, www.irs.gov.