LIBERTY TAX SERVICE Franchise Complaints

5,730 thoughts on “LIBERTY TAX SERVICE Franchise Complaints”

• The nice thing about Liberty going public is the information that is provided in their
  financial statements. To date they have borrowed $17,210,000 from their line of credit compared to $11,078,000 this time last year. Cash as of 7/31/13 is $8,573,000 down from $19,013,000 as of 4/31/13. In a three month period they have gone through $27,650,000 in cash.

  It will be interesting to see what their new borrowing terms are.

• It would be very difficult to hold out until March. HRB has the deep pockets to do so, but how many Liberty and JH franchisees do the same? I don’t think too many! I know when I had the late season start last year, it was difficult to make expenses. Add to that a minimum fee that’s due no matter what, I would think a Liberty franchisee would not be able to stay open. I’m glad to be out of their system but I really sympathize with those that do not know yet how much money they are about to lose. Any one who has even bothered to call me has gotten an earful on what it is actually like to be a franchisee. I’m amazed that corporate LTS even allows them to call me. It just goes to show how stupid they can be. Kind of funny too because I’m able to unload on them and I make sure it is not a corporate call by asking the caller if they are associated or employed by Liberty in any way. That is good for the occasional hangup. It was also easy to determine if it was a corporate call by the 757 area code. They are getting smarter by using cell phone area codes out in CA. This is also how they check to see if former and current Zee’s are in compliance with their non disparage clause.

  I can’t understand why the stock is so inflated-it seems a little fishy! I gues you can still fool some of the people some of the time.

• Thanks, Guest2…a bad situation, and the govt and IRS aren’t helping either.

• I think this year’s filing season delay will be a little easier for tax prep places than last year’s was because at least the software will be in place and useable (although not IRS approved). Recall that last filing season Congress did not make all those changes to the tax code until early January 2013. That forced programmers to work 24/7 to rewrite computer code to handle the myriad computational changes, and then had to wait for the IRS to approve the programs before they could be released for use. I for one like to start working on partnership returns in early January before the office gets busy, but this year there was no software to work with.

  There are a lot of tax law changes for 2013, but they were all put into place in January. The programmers have had nearly a year to create workable programs. While no returns can be filed until the IRS updates its systems and approves each software program, at least preparers will be able to complete returns and then hold them until the IRS gives the green light. This past January early filers had to be turned away, but next January their returns can be completed and fees collected even though the return itself can’t be filed immediately.

• @SaraEA – That is true, however we still have a problem with the possible shut down in Jan 2014 of the government and the IRS has left that as a possibility. I guess Dec will be at least have a closer date. This situation in the tax industry is no more than government risk at it’s finest. It is now happening in the health care industry. Oh joy!

• SareEA: you make a good point in that you can get the returns prepared and just need to what to file. Sounds like a good portion of your clients have the means to pay you directly. How it effects Liberty Corp and franchisees in the Liberty system is many of the early filers pay through bank products. A delay in filing means a delay in getting paid fees. Corp. uses fee intercept to collect the operating loans from the previous year.

• @Bill – Yup a LTS franchisee will have nothing for most of the paying tax season. It will be a recipe for disaster. Of course John is going to find more money for funding, which just makes a zee more of an indentured slave than a business owner.

  I only get paid on a few returns prior to Feb and Mar and April money flows without bank products.

• It looks like the secret is to get paid up front, thus making the Liberty system obsolete! Hmmmmmmm………

• During the first weeks lower the price to the point where if the client will pay cash do it. Would you rather take 50 bucks to your bank or 250 to johns bank?

• A consideration for all in the industry
  The govt is funded til jan 15th. That is a potential roadblock but not the most serious to me.
  The big concern I have is this.
  If IRS opens jan 28- feb 4 or there abouts…….the debt ceiling comes up again on feb 7th.
  If the children in Washington play hissy fit games and fail to raise the debt ceiling I can foresee no payments out of the treasury…..no refunds paid……a lock down of treasury payments for any reason.
  This is in the funding timeline of a 1/28-2/4 acceptance by IRS.
  Pay up front folks may get mad and bank product customers may get mad.
  I don’t think it likely but would feel foolish if I dint pland for this possibility

• @greg. Agree. It’s possible funding will also delay refunds. Consider another chance that late opening might also mean more returns get a review and longer to get refund. IRS mentioned new checks in place. We’ll see. No reason to lower fees to $50.00. Many unhappy franchisees across the board – JH, Lib., HR. Get ready now. Unpaid landlords, etc.

• What date is LTS going to tell us to open up? Rumor this year was full time starting 12/26. For sure 01/02. Yup, nothing like paying for payroll and guerrilla marketing for a 6 weeks before any money hits the bank account. Worse if one has fee intercept, they may not have any money until March. In the real world it is called OB. Out of business!

• ^^^Sorry to all of you hard working franchisees, but I am SO glad to be out of that dump. Hope the rest of you can get out as soon as you can. Paying for payroll and guerrilla marketing was incredibly stressful. John’s hand was always out first. I got out even before they had certain set hours for you to be open. Yikes. It did get worse and worse with each passing year. There was and still is very little chance to make a profit with this franchise. Almost impossible. After all, everyone gets paid before I do and there was almost nothing left. And that is with “successful” offices. “Successful” offices where if you have more than one location, the employees find a way to rip you off. Even the “trustworthy” ones.

  The LTS system IS obsolete. Back in the 1990’s it made sense. In today’s day & age: no sense. What they don’t tell you is that you pay rent for an entire year, even though the season is a few months. We always picked better locations within our territories than they did. Always. Garbage, no other word to describe this franchise and it’s leader. Yucch. Gotta love the ads: Come work for us, buy a territory, no experience needed. Yeah, just a big wallet. Nothing else. No brain needed either. Actually, no brain is better, because if you know too much, then you see why you should NEVER have invested in this franchise to begin with. But by then it’s too late. You’re already in, losing money each day and stressing over things that should work, like their software. It NEVER did. Not in the entire 5 years I was with them. They also changed banks every year.

  Do not sign on the proverbial dotted line. You will never recoup your investment and when you leave, you start all over again somewhere else. As if those 5 years never existed. This is way different than a McDonald’s franchise. In this industry, you develop a relationship with “your” clients. Well, they aren’t yours. They are theirs. With a McDonald’s you are catering to the general public. Different mentality altogether. Bill says it best: Buyer beware.

• Seriously? Takje $50 now instead of $250 a month from now? You know, you might want to consider getting a W2 job, I’m just not sure you understand how to run a business.

• @SanFran – They are still changing banks and wanting more and more out of the zees. It is pretty sad when a part time business as it is sold turns into a full time drain. Hopefully qctibs will make it this year, because he/she is a much better business person than the rest here. Don’t have to live off loans and writes everything that floats through the door, no questions asked.

  This past two tax season, older zees are having problems in my area. I can’t see it getting any better. One thing about working for a zee, at least you get a paycheck unlike a zee, just a bill and a headache.

• ^^Franchizee:

  I know you’ve been wanting to exit for a long time. I really wish you the best. Just know that when you exit, if you do not exit the way they EXPECT you to, for any reason at all, they will find you, hunt you down and make your life a living hell. If other people have gotten away with it, as some have written here, good for them. (Where they left and quietly opened up shop nearby) But don’t expect that to happen to you. If someone survives the 5 years and leaves, you better be sure they will follow up to make sure you leave on their terms, not yours. It’s Liberty Tax, after all, where you sign over your entire life savings and then get subjected to Nazi-ish torture for the life of the contract and then they chew you up and spit you out. Franchisees that have flown under the radar…..it’s pretty rare, but good for them! Maybe not all franchises are like this, but this one sure is. No doubt whatsoever. Best of luck as you near the end of your contract.

• SanFranDan, you have mentioned several times that “the employees find a way to rip you off.” This appears to be one of the heartaches you endured as a Liberty franchisee. How does this happen? Is it more likely to happen when one owns several territories and thus can’t be there defending his or her assets at each location all the time? Is it more likely to happen at a Liberty than at some other franchise? Is the cause that tax preparers are paid so little for the amount of knowledge and degree of responsibility they bring to the job that they are enticed to grab a little more for themselves?

  I’ve hear of employees stealing toilet paper or pens, but that should be chalked up to the cost of doing business. I have a hunch what you’re complaining about runs deeper.

• Waiting to see what the “new” and “improved” contract states. Hopefully in a couple of months or so. Listening to John, his prospects are not very hopeful with another bad start to a new tax season. It is going to be super hard on everyone. This is the 3rd tax season with a crummy start, but at least he is much more transparent than the last 2 seasons.

• Who was that guy that was commenting on sanfrandan….
  I need his number
  After that comment I know who I want doing my taxes
  That liberty franchisee is all character
  I want him to do my taxes

• @Greg – He gives us all a “warm fuzzy”

• SaraEA:

  Re: Employees ripping you off

  Yes, many methods were employed, we were shocked! Who thinks of these things?

  1) Filing tax returns for people they knew, collecting cash, filing it as a free return

  2) Employees (including managers) would falsify their time cards

  3) One employee would do a tax return, it would appear on the main computer processed returns list and then they figured out how to “erase it” off my server

  4) One employee stole checks and forged my name and went to a payroll service to cash it

  5) Early on one employee had falsified W2’s from a large company, the IRS approved the tax return because at that time they only checked SS#’s and to see if the company existed, the employee had used a friend of hers too file the tax return with an EIC and cashed the check at a check cashing store late at night

  The employees were incredibly creative in finding ways to rip me off. No matter how careful you think you are, if you have more than once location, trouble occurs.
  I also had the Liberty costume wavers selling drugs at the corner where my main store was. This was all because Liberty made sure to put me in an area of the under served in the urban opportunity setting.

  PS: I saw the note this morning about me being “schitzo”……..thanks ADMIN for deleting. If I am schitzo, it’s because of my 5 years with this disgusting company and their horrible harassment tactics.

• San Fran, this is the type of stuff that happens in convenience stores where employees need no education or experience, don’t get paid much, and work the night shift when no one oversees them. The lesson for all Liberty franchisees is to screen your new hires well. Get to know every one of your employees so they get to know and love you. Create a team. Make sure your door is always open so they can discuss any concerns with you. Bad headlines or a bad reputation coming from one Liberty store affect you all, so make sure you don’t contribute to the problem.

• SanFran,

  You proving that you are a poor business operator. What you mention can happen in any retail business. The fact that it all happen to you shows how poorly you managed your stores. Just stick to being a W2 employee.

  Good Luck

• SaraEA:

  It doesn’t matter what you do. My business partner & I did create teams. The employees were paid well, had good bonuses and we always threw a big dinner party at the end of tax season with certificates and small gifts. No matter what I say on this forum now, it will be judged and criticized by you know who. So I will go back to saying little. No matter how many times I say I was successful but still can’t stand this franchise, “they” will continue to pick me apart. The truth is the same: I was successful by Liberty standards and I HATE everything about this franchise and their system. I now own my own business unrelated to taxes and accounting, thank goodness, and NOT a franchise. Ever again.

• Everyone knows employee theft is the number one problem with all businesses. Even with employees who are licensed, bonded and finger printed will, if given a chance steal. Anyone that believes you can set up a team etc, are not in realityville. Most of the time,owner’s are not aware of the theft, which is why it is hard to detect. Some of the largest theft’s is stealing time. In the larger corporation’s supplies are monitored and so are computers for all same reason.

  Employee theft has escalated since the recession. You are correct SanFran. I have been in business for all my life from my parent’s to now. Employees suck. Employee theft with LTS is huge due to Cash in a Flash and Send a Friends especially at $50. a pop. They talk (LTS) about how to prevent it.

• There are a couple of Bozos like testaipira, qctibs, and some of the guests with numbers that seem to do a whole lot of defending this moribund franchise as opposed to offering real solutions to the issues the current and former franchisees are sharing here. It just seems that Hewitt and Liberty are actively trying to rebut what are actual concerns within their system while not helping anyone to fix the system or improve it. That was my experience with Liberty Tax-they ignore what the Zee’s are saying and go along and continue to siphon money from wherever and whoever they can. In comment to how employees suck, the employees under the Liberty system of “cash in a Flash” will have someone they know claim the cash and make out a false tax return. The cash would be split between the ‘customer’ and the preparer. Employees also knowing where the cash is kept, will use it as their personal cigarette and booze fund when I was not there. There are much better controls when you do not have multiple stores for the simple reason you can’t be everywhere all the time.

  You must remember that the only help you get from Liberty is them helping themselves to your money.

• I think you want to have some respect for your employees. They know when you don’t. Even so, you still have to put security in place. ‘Cashless’ stores are possible. Can’t forget employees have no skin in the game. Feel like they are just watching you make money. All businesses have security problems. Sorry about your experience. It sounds like a nightmare. Checks should always be managed like ‘gold’. Highlights most can manage one location, but not multiples.

• Too Funny, Franchizee, Scammed1 and San Fran are obviously same person posting 3 times in an hour. Makes me laugh. Based on your disturbed brain, no employee can be trusted ever under any circumstances, therefore, don’t have employees, just do everything yourself…. Seriously, give it up.

• Just one more thing. @scammed – what kind of employees were you hiring? I work with some great people, so I feel like speaking up for them. I don’t worry about cigarettes and booze in a tax office. Working with p-tined, tested, tax preparers. This site provides very useful information for anybody looking to be a franchisee or already one. It they come in stealing and smelling like cigarettes and booze; your pay is too low. Have a nice day.

• Scammed seems angry at the world. What is it that you wanted Liberty to do for you if you keep hiring thieves in your office? You wanted someone at corporate to do the hiring for you? You keep proving why you should never have been a business owner in the first place. I do blame corporate for selling a territory to someone so incompetent and disturbed.

• Liberty Tax is a horrible franchise. BUY AN H&R Block their franchisees are happy and loaded! !

• Testaipira-It seems abundantly obvious you are the disturbed one. Liberty Tax set out a group of hiring guidelines that we all were to follow. John Hewitt himself often told us zee’s to hire people from the 1 or 8 week tax classes. He also said that this would enough training to allow these people to meet P-Tin requirements. The average wage per hour I paid was high for my area : around $16 per hour plus a 5% bonus. This had most of my employees earning well north of $25 an hour. I don’t think wages were the issue so much as having multiple offices that cannot be controlled. Liberty encouraged zee’s to buy multiple territories since few were buying them from the outside.Liberty offered no additional training for running multiple stores. They said you have to “qualify” for the advanced training they offer supposedly when they deem you worthy. Even though I bought several territories this training was never offered to me. My first store was successful, but as others were added, the profits went way down. Most of the thieves in my office were from Liberty Tax and their ways of taking as much royalties when they could. If anybody is incompetent and disturbed as testaipira, it would be the corporate monkeys of Liberty Tax let by King John Screwitt.

• Hello everyone,

  And qctibs ;-)

  “Trisha” has not lost an ounce of credibility and never will. I enjoy watching what you have been doing on this board. If LTS has any rebuttals, they have had plenty of opportunity to do so themselves and make an announcement. We all know that is not smart of the guilty and makes no sense in their position.

  I think that you, qtibs need to focus less on the DOJ and IRS time table of when they take on their action and take a few notes about credibility and accountability. You are still not using your real name.

  The Martin Vs JTH case was set for grand jury until about 3 years after original complaint and that was considered fast. John Hewitt scrambled and the case was set for trial and MY deposition was very influential in the case. It actually brought justice to the CUSTOMERS involved in just that small area.
  ***Imagine if the customers everywhere else learned that information and had a go with it?
  They complain of very similar experiences everywhere when Liberty does not back up their guarantee as they sit with their audit letters or desk reviews. The threat of a the jury decision from trial set May 1, 2013 was too great of a risk for the CEO who met all the criteria to be on trial for racketeering and other misbehaviors. He tried, he failed to defend himself. Look up the summary if you dare. HE LOST. If anyone smart reviews the case which he bowed and settled to from desperate fear of a nationwide followup of lawsuits and media attention, they will figure out how to sue him in EVERY state.

  I enjoy watching you post to keep focus on putting other franchisees down, but irrepairable damages to LTS goes beyond this board and beyond this very moment in time and you damn well know it.
  If anyone is steering, it would be you because you do not want focus on the facts and findings that forced him to settle and attempt to keep it quiet.

  Be careful and never believe I give up on anything I say I will do. As I warned, keep my name from your posts unless you are here to thank me.

  -Trisha ;-)

• Trisha! :)

  You’re back!!! Congratulations. I always knew that bastard “settled” to keep his name out of the headlines. I so wish there was a way to notify the big news programs about doing a story on him. Is that in the works? Dateline, 20/20, they’d have to devote the entire hour to this.

  In today’s world, NOT treating your franchises well, cheating them, stomping on them, ripping them off will always come back to haunt them in today’s world of the internet. Something that JTH undervalued.

  qctibs, testipira, guest1974, guest4444 are really the ones who are all one in the same. They tease and taunt, but never come up with real facts or solutions.

  ADMIN: Thank you SO much again for having a forum like this, where we can all discuss the REAL situation and not some fake front for prospective franchisees to evaluate.

  Again, if you are looking to own a Liberty Tax franchise…….back away, save your money and look elsewhere. I am trying to save you heartache, thousands of dollars and tons of stress. You’ll be so much better off elsewhere.

• Thanks Trisha – Suspected he paid them off. Someday he will run out of money but especially at of time.

• Scammed1 and Trisha:

  You managed to do what nobody else could do up until this point: To get qctibs, aka testipira, aka guest 1974, aka guest 4444 to shut their damn traps. Congratulations guys! That’s some feat! I’ll bet it’s not for very long at all unfortunately….. :(

• Trisha – please post more detail – I would be interested to hear what happened in the case you are referring to – and you seem to have detail at hand.

  Obviously, sometimes companies settle because it’s less expensive than to fight, even if the company is not guilty. Also, it’s possible the franchisee put Liberty at risk, as happened in California with the franchisees not following the advertising guildelines, and with what AF was doing (and I know you would debate that AF was acting on her own). Then there is also the scenario where the company is just guilty. I look forward to hearing from you.

  Thank you.

• Wow, Trisha!

  You got a “please” and a “thank you” from qctibs! You obviously have information he’s looking for to be so polite! :)

  Yes, Trisha…..do tell! Oh yeah, AF (Annie Fuller), just say her name qctibs.

  There is NO WAY IN HELL that John Hewitt settled because he is not guilty. PULEASE. Even you have to have more brains than that.

• Nearing the end of franchise sales season, how has Liberty fared in their efforts to sign up hundreds more franchisee’s? My guess is not too well according to some of the accountants that have been approached by LTS. LTS is claiming to have the accountants “sell” their practice to Liberty. Once they get your attention, they then tell you that you have to buy into their wonderful system for the usual reasons. Most of the people sought out by the crooks at Liberty, are quite savvy to the methods used by Hewitt and are not buying in to the ‘kool-aide’. Liberty is still marketing to those who are not as educated in the ups and downs of the tax business and to those that are most likely to be sold by a slick huckster like Hewitt. Still doing the same old scam.

• When ever I come to this site I always go to the most recent comment, Tonight however I stopped at the top of the page and read the first post on this site from Boston Tax and Barbara Green. How true those comments are and here we are
  now with over 2939 comments still trying to get the word out that investing with this company is a mistake. Boston tea built a successful tax practice and realized it was Liberty Tax Service that was the benefactor of his hard work and money and that it didn’t make sense for him to continue with this company. In Mrs. Green’s post she points out that the only reason to buy a franchise is ‘the business model is a proven marketing success as evidenced by the profitable franchisees.” which is not the case with Liberty.

  When I went to the SBA for advise about this franchise, he did a quick search and found nothing on the internet to say it wasn’t. How I wish this site was available then.

  To anyone who has purchased a franchise this year you still have the opportunity to get out. You may need the help of an attorney but there will be certain performance issues that you can use as an escape clause.

  Buyer Beware!!!

• If enough franchisees become ex franchisees, the Liberty Legal department will have a hard time catching up. They do hire a lot of lawyers, mostly younger ones out of law school recently. John will have to hire more lawyers, which will be a strain on his budget, for a change. Remember, LTS is vulnerable now that the word is out as to how crooked they are.

• John John and his cronies are very crooked. They try to strong arm everyone. Now there are stockholders to answer to, he is pressing zee’s to do this and that even if it stretches the parameters of being an independent contractor according to the IRS. He is treating zees like employees and using the franchise agreement very liberally as a tool to black mail people. Of course if you owe them money, they can make you comply no matter what. Don’t owe money, they has changed the contract to still strong hold zees who sign on the dotted line.

  What to do, what to do….Sign or don’t sign that will be the question for every zee as time marches on. Once you sign, you become a slave to the franchise agreement, and the reason for the word slave is because the zee does not have any money, just debt.

• Gee whiz:

  I’m so disappointed that qctibs or any of the other stooges haven’t written in awhile! I miss them so…….NOT! Still waiting for Trisha’s response? Trisha, take your time responding so we don’t have to see their ridiculous posts! :)

  Franchizee:

  Your posts & views are right on the money. PLEASE do yourself a favor and DO NOT RENEW! Yes, Liberty Tax DOES blackmail their franchisees. But that’s just the beginning. I’m not sure there are enough negative adjectives to describe what really goes on their behind closed doors in their very secretive corporate office.

  They absolutely treat zees like employees, unless they need to blame someone. Then all of a sudden, it’s totally the zees business, not theirs! Huh?!?!? Oh yes, they have found a way to have their cake and eat it too.

  But not for long! The IRS and DOJ are catching up to them. Once they have enough evidence, which will be an overwhelming amount, then they can pounce. Wish they could shut down the whole company, but since Hewitt made it into a stock company, probably not gonna happen. Too bad. Well, at least he’ll be in jail, and that’s enough for me! ;)

• With the delay in tax season, LTS seems to be just a waste of money. They want their zees to open on Dec 26. Like are you crazy!??!?! A month before any returns are to be sent to the IRS. Most likely open almost the 12 hour days. That should put a lot of zees in a huge bind of running out of cash or a larger debt.

  I will let you know if we sign or not…..

• December 26 everyone will be at the mall returning gifts, using gift cards, or shopping the after Christmas sales. Bad day in the tax office. The rest of December, however, should attract clients who need to do tax planning. Should they sell some losing stocks to offset gains, do they need to increase or decrease their Jan 15 estimate, should they pay January tuition or property taxes in December, make charitable contributions now or in January??? I don’t think the offices will need to be open 12 hours a day to handle this group, perhaps the standard 8 hours or by appointment only. Is that an option?

• Nope, they would have to call each office to check up on them. They have AD’s to do that job. John feels that the offices that open early do better than the rest.

• Franchizee: the first thing you should do is get the hell out of Dodge! The second thing is, if you ignore the first, is not waste time or money being open on the 26th. No one will show up! No one will be there until at LEAST the 18th of January. This year, with the known filing date of being around the beginning of February, how can you even accomplish anything by twiddling your thumbs for a month to 6 weeks? Give me a break! I could never understand why you have to be open so early in the season. Your first customer through the door is usually around the 20th of January. Most people are so savvy to having their returns done for free or on line, this early business will decline. Again, another example of Liberty’s failed business model and their inability to adapt.

• @TexasTee – You are preaching to the choir. You know people now know for the last two tax seasons it is later, so I would suspect people will start rolling in after Jan 20th or later waiting for their W-2 etc. But that is the scuttlebutt going around since earlier this year.

• C’mon everyone! Let’s set a goal of reaching 3,000 unhappy posts before the end of the year! Just in time for the beginning of Tax season, which, if people have been following these posts, they should NOT buy into this franchise. They are unethical SOB’s that make you part with your money and give you nothing but grief and aggravation in return. The head honcho is the worst, along with the corporate staff and especially the AD’s and the legal depts. My hope & wish is that they all get what they deserve, and soon. I remember posting a New Year’s wish last year and I can’t believe it’s been another year already. Anyone looking to part with their hard earned money, this would NOT be the way to go. It’s a scam and a sham. Thank goodness I got out. I waited till my 5 year contract was up, but boy it was the toughest and most stressful 5 years of my life and I wouldn’t wish it upon my worst enemy. Better to back away and look elsewhere. There are scam artists out there at every twist and turn, but this one is especially bad. Do your due diligence and then go elsewhere.

• Well we have emails on opening a desk with Ace’s Cash service, ya that sounds like a huge money maker! It seems LTS is grasping at straws to make this the best tax season ever! Well with the delay upon probably another delay, it just not going to happen.

  My agreement comes up in late December so will keep you all posted! Don’t want LTS to know my true cover.