Would you pay over 100% (maybe even 500%) annual interest to get money you could have for free nine days later? Many, mainly poorer, taxpayers are being lured into doing this by some of the major, national, discount tax preparation firms this tax season.

In one preparation firm's computer system, when the tax preparer's computer shows that the client is due a refund, the very next prompt asks the preparer if he or she has explained the "Rapid Refund" to the client.

This explanation does not include informing the client of what the interest rate on such a deal would be: in fact, that never appears on the computer screen, but first appears on the "truth-in-lending" printout, which only comes after the client has signed the Refund Anticipation Loan (RAL) application, which also has no listing of either the interest charges, rates, or other fees for processing the loan. The computer program will not allow the interest rate to be printed until a while after the preparer positively answers the question "Has the client signed the loan application?" So the client has been had even before she knows what bit her.

Here are a couple of examples of the RAL fees at one national, discount preparation firm:

If your refund amount is $500, you'd pay $29.95 in bank fees (interest), plus $36 in RAL fees, for a total of $69.95. If your refund is $1,600, you'd pay at least $69.96 in bank fees (interest), plus the $36 in RAL fees for a total of $106. That doesn't include fees for preparing the return itself, which at some firms start at about $50.

Thus a taxpayer with a $600 refund would pay about $75 in finance charges, plus $50 in tax prep fees (for the simplest return) just to get a check for only $475 nine days sooner. The annualized interest rate would be about 450%!

If the taxpayer were to wait those nine days, the IRS would automatically credit the taxpayer's account for the full $600. But the clients are not encouraged to pay $50 now and wait the nine extra days to get the full $600. Many clients are so poor that they willingly take the cash up front.

The rationales for interest and finance charges are that interest is compensation for the risk that the loan will not be repaid and finance charges cover the labor costs and paperwork involved in moving the money around. Here, these two rationales don't justify the fees charged; the loan is for only nine days and it will be repaid with complete certainty, as the payer is the IRS, which, assuming the tax firm prepared the return accurately, will pay the tax refund.

Pushing these loans helps to run up transaction fees for the banks and finance companies that work in partnership with large, discount, national tax preparation firms. Nowadays, with the current level of financial deregulation, many of these tax preparation companies are owned by or have merged with banks or finance companies. The old barriers no longer exist. So now we see companies finding ways to extract finance charges from every product they sell, service they provide, and transaction they process. Even if the client is penniless.

At some tax firms, the scam doesn't end with the RAL. The computer also prompts the preparer to ask such questions as "Do you have credit card debt over $1,000?" (This question has no relevance to the tax return, as personal credit card interest is not deductible.) If he answers "yes," the computer will also print advice on how to get a home equity loan (from the tax preparation firm's credit wing, naturally) to pay off the credit card debt!

Similarly, the computer program will prompt the preparer to explain the company's IRA schemes, and the printout will tout these, too. And it will ask other questions not required to complete the tax return: "Do you plan to have a child in the next year?" "Do you plan to change your marital status in the next year?" Of course, the tax preparation firm's financial wing has offers for these people, too. It's a way to sell more of the company's products, often at the expense of the client.

If you're confronted with these schemes, you don't have to answer any of these questions, and you don't have to take the Rapid Refund or sign the RAL-Loan Application. When the preparer tries to push it, ask the preparer to tell you what the annual interest rate will be. Most won't be able to answer this question.

Better yet, do your taxes at home with a paper and pencil, or on your home computer. Tax software costs less than the preparer's $50 minimum fee, and paper forms cost nothing. You won't have to answer any unrelated questions and your answers won't go into a database for future marketing efforts directed at you. You can even file electronically on your own and get the refund (if any) credited to your bank account from the IRS within about 10 days.

For low-income people who have difficulty understanding the forms and instructions or have questions about their tax status and filing requirements, the AARP (American Association of Retired Persons) provides free tax preparation help at local public libraries and community centers. You can call the Seattle Public Library (386-4636) or local AARP (517-9348 or 1-800-922-8716) for more information.

And finally, if you're disgusted with how the government uses your tax money (on enormously expensive military hardware, for example) and want to become a war tax resister, you can contact the friendly folks at NACC (Nonviolent Action Community of Cascadia, 206-547-0952) for advice on how to resist paying taxes. Thousands do it every year; you could be one of them! (NACC will have a public workshop on war tax resistance April 7; watch the calendar for details.)