In Brief: Del. Bank Ends IRS Check Policy Challenge

WASHINGTON - Beneficial National Bank of Wilmington, Del., has dropped efforts to force the Internal Revenue Service to change a tax refund policy affecting refund-anticipation loans.

The bank said it withdrew its legal challenge because the court would not have ruled in time to affect this year's filings.

Beneficial is worried that it could lose millions of dollars on its refund-anticipation loan business because the IRS is ignoring direct- deposit requests for refunds of the earned income tax credit.

Borrowers are supposed to pay off refund-anticipation loans by instructing the IRS to deposit their refund checks directly in accounts that Beneficial controls. But the IRS, as part of a program to eliminate fraud, is issuing separate checks for refunds of the earned income tax credit, and computer limitations prevent the agency from depositing these checks directly into individual accounts.

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