The MyAccountCard program from the U.S. Treasury Department has been suspended after an analysis of the pilot program found it was neither saving money nor being utilized.
The $1.4 million program was set up to distribute 2010 tax refunds on reloadable prepaid debit cards. The Treasury Department selected 808,000 low to moderate-income tax filers to participate and receive their tax refunds electronically rather than by paper checks. It costs $1 to make a check payment versus 10 cents for an electronic payment, according to the Treasury.
When the Treasury asked the Urban Institute, an advocacy group which analyzes social and economic problems, to conduct a study of the MyAccountCard program, the results were alarming to many members of the House Ways and Means Committee.
“Over the past two years, I have expressed concerns with this program and its effectiveness,” said Charles Boustany, Jr., R-Louisiana. He pointed to the following findings:
Of the 808,000 taxpayers selected to participate in the pilot, 12.5 percent of the invitations were never received because they were sent to wrong addresses. The Urban Institute estimated that only 707,000 invitations were actually received.
How many people actually ended up receiving a MyAccountCard?
A total of 1,933 taxpayers were issued a prepaid debit card for their 2010 tax refund; however, only 644 of those recipients ever used their MyAccountCards. In its conclusion, the Urban Institute found that less than one-tenth of one percent of those who were chosen to participate in the debit card program actually used their cards. Since the program cost $1.4 million, that breaks down to over $4,000 per participant who used the cards.
Though MyAccountCard was discontinued after the House Ways and Means Committee pushed for the results of the Urban Institute’s study to be made public, no details have been released by the Treasury to explain the failure of the program.
The Treasury actually defended MyAccountCard. “We believe the pilot produced useful information that will inform efforts going forward to transition paper check tax refunds to electronic refunds,” said Treasury spokesman Matt Anderson.