LIBERTY TAX SERVICE Franchise Complaints
UnhappyFranchisee.com asked: Are LIBERTY TAX SERVICE Franchise Owners Happy? If you’re familiar
with the Liberty Tax franchise, please share a comment below.
Entrepreneur magazine has ranked the Liberty Tax Service franchise #3 behind McDonald’s & Subway. However, some commenters who claimed to be former Liberty Tax franchisees left stern warnings on the Franchise-chat forum.
This post was originally published
BostonTax wrote:
I’m a former Liberty Tax Franchisee
I hope you are ready for a little enlightenment! I held a successful Liberty Tax Franchise for 5 years until I decided to let the franchise agreement lapse. I did this for a few reasons:
1. The royalty fees were outrageous! 14% went to normal royalty while and ADDITIONAL 5% went for so called advertising royalties. The ad royalties were supposed to be put back into your local market to build the brand name. This was never done! All advertising in addition to the ad royalty I had to pay for because it did not fit into Liberty’s concept of advertising. I don’t know exactly what the concept was because our AD could not give an answer and the approved methods changed by the week.
2. Corporate was totally unresponsive to the needs of the franchisees. The AD system is designed to recruit anyone who can write a check for 100K. No other skills or ability required.
3. The minute you are behind in a royalty payment, they send you a notice to cure. After that, if you don’tpay, they try to terminate your franchise agreement.
4. Upon termination, Liberty enforces through legal proceeding a 2 year, 25 mile radis non compete clause that is in the franchise agreement. This is enforceable in the Eastern Division of the Federal District court, where, at least 2 Liberty friendly judges preside.
5. Liberty does not recognize chargebacks for bad debts as an adjustment for your royalty fees. All royalties are based on your gross, not your net collectable. This was an ongoing issue with them and the accounting department did not have the ability or the inclination to resolve!
My best advice is do not go with these guys, they are bad news. If you like to have people collect royalties and provide no support, then this is the franchise for you! It is very expensive to get into, the initial fee is around $32K just to buy the territory plus those pesky royalties. You can’t make money on this concept.Most of the surviving franchisees I’ve talked to in the last 2 years have experienced great difficulty not only in making a profit, but in the corporate support or lack thereof.Remember, 19% of your gross is getting kicked back to Liberty, which is excessive by any standards. Please do yourself a favor and call former franchisees ,those that are currently getting sued (they are very likely to talk, as I found out), and current ones to try to get the straight poop.
Barbara Green wrote:
I too was a Liberty Tax Franchisee and I agree with everything you said.
The only reason for purchasing any franchise is because the business model is a proven marketing success as evidenced by the profitable franchisees. That is why you pay a license fee of $25,000. Being profitable is not in the cards for a Liberty Tax franchisee. Liberty Tax’s market/ business model is aimed at individuals who have very simple tax returns, i.e one W-2 and standard deduction which is why they were very successful in Norfolk, Va. That market is full of military people with one w-2.
Liberty will sell anyone a franchise at any location, in any georgraphic area, even if there is not a chance in hell of the franchisee being successful.
At one time, I too owned a Liberty Tax Franchise for one tax season. It was only one season because of the behavior of the Regional Manager who called me on January 15th demanding and screaming “Why had I not generated 200 tax returns and that maybe this business was not for me. I was stunned and confused since employers are given until January 31st. to give w-2’s to employees. Apparently, he thought that I was in Norfolk, Va. where that is possible.
It only goes downhill from there. The bottom line is I lost all of my investment in this businees (approx. $80,000) because I closed it rather than becoming a victim of this unethical company. NOthing would make me happier than to be a part of a class action lawsuit.
WHAT DO YOU THINK? DO YOU OR HAVE YOU OWNED A LIBERTY TAX SERVICE FRANCHISE? ARE LIBERTY TAX SERVICE FRANCHISEES HAPPY? WHY OR WHY NOT?
.
SanfranDan: I agree the company is on borrowed time and I only hope the IRS and DOJ will pursue the company for these fraudulent acts.
when I look back at this company and it’s actions it’s clear to me that the whole purpose of building the company was to have a successful IPO and cash out. However, I didn’t understand why they pushed the IPO when they did because of the state of the market. I thought they did it because they had concerns that with so many failing franchisees they couldn’t sustain that growth. Now it clear that the company knew eventually the fraud they helped perpetuate would likely be discovered.
Hine site is 20/20 when I was researching this company to become a franchisee they told me that they provide no financing to franchisees. However, when I attended the marketing seminar there was a man from an urban area who had questions about his lack of tax knowledge and financing. JH assured him that if he was really interested in they could make things workout.
If I was the investigator on this case one of the things I would focus on is the initial financing of the franchisees accused of fraud. I would look to build a case of willful intent to sell franchisees to untrained “tax professionals” who could unknowingly be manipulated by the company to prepare fraudulent returns.
I’m sure the attorney’s for the franchisees will try to show the blame rest with the company.
bill:
You are right on target. The reason for the IPO and cash out plan was that in 1997 when this awful company began in Canada, and then was brought to the US, they were very big in scaring us potential franchisees on their non-disparaging clause that we could NOT disparage them OR talk negatively about the companies practices once we left.
BULL CRAP
What then happened was the internet took over loud & clear. And thank goodness to ADMIN for beginning this site. Apparently MANY franchises use bullying techniques into scaring franchisees not to talk about their ‘negative’ experiences. The longer no one talked about anything negative, the longer they could fraud the American people and the Federal Government, making money every step of the way on other people’s misfortunes and make believe businesses.
If you read through some of the other posts on this website, you will see that bullying takes center stage in almost every Franchise company as a major tactic in scaring ordinary every day good people into keeping quiet about what they see take place. NO ONE should EVER feel bullied (like I did) or so many others did.
Why else would their largest dept. be consisting of Lawyers, Lawyers and more Lawyers? :(
Anyone interested in this company that hasn’t been scared away yet should google all of the legal court cases between Liberty and their Franchisees or between Liberty customers & corporate. What an eye opener.
If the DOJ is reading this: Hewitt has bought property on Grand Cayman: A Bank. Hmmmmmm. Wonder why??? Do you think that’s where he stores all of OUR millions? Could he be extradited back to the US to face charges? One has to wonder….
Believe me, my life would be SO incredibly different if I, too, did not join this hell hole for 5 years. It changed my life completely. As you say: Buyer Beware, then back away and put your money elsewhere.
If anyone sees any more newspaper articles, could you please link them here? Thanks so much.
http://www.accountingtoday.com/news/tax-practice/liberty-tax-franchisees-hit-with-more-charges-77550-1.html
Set up a google alert there are really bad ones about every other day this year.
When these franchisees made the news Liberty didn’t have much to say. Now that they have been given time their telling people that they were the ones that first reported these franchisees and want to know why it took the IRS/Maryland so long to react.
Interesting how the Maryland franchisees were exploiting the homeless, the drug addicted etc. to file fraudulent returns. These are the same tactics that the company condoned and I listened to from then top gun and trainer Annie Fuller talk about on conference calls.
The question should be if corporate thought there was enough fraud being committed, why did they not terminate the franchise?
That should be the question that the DOJ and IRS need to ask.
Bill is correct – We all heard Annie Fuller and Danny Hewitt recruiting Section 8 people and Annie at bars giving drunk people $50 to have their taxes done. She was also at gas stations, etc. They were approved by John Hewitt who was giddy over the “new” way of recruiting new customers. Guerilla Marketing at it’s finest!
The Zee in my area, would stalk people in Walmart and hand out $50 coupons, when anyone with a brain knows, you can’t hand out anything in other stores, because it’s against their rules. They would intentionally look for very poor people and hand them $50 coupon to have their taxes done.
What a bunch of illegal jokers!
It has become apparent that Liberty is more than willing to throw their franchisee’s under the bus. It doesn’t matter to the IRS or the DOJ who they punish, just as long as they can punish someone. They are evaluated on how many cases are opened, how many are prosecuted and how many are won by the prosecution. Liberty is too big for DOJ/IRS to get their quick hit and run statistic for their portfolios. This is at the expense of the small guys, namely us Zee’s. What the government is failing to see that there is a definite pattern to tax fraud that is prevalent in the Liberty Tax Corporate structure. It really should be the Hewitts and the Fullers of this franchise system that should be punished, not the little guys.
Liberty has and is committed to helping their franchisee’s to commit fraud in order to make more royalty money. When the heat turns up, such as governmental investigation, Liberty is quick to rat out their own franchisee’s and claim that they were cooperating all along. Give me a break! They are the ones encouraging and teaching their franchisees how to defraud in the first place. I don’t think the Feds are able or willing to after these clowns just because of how long it takes to make a case. But, you will certainly see a whole bunch of Liberty franchisee’s being prosecuted. I spoke about the fraud much earlier in this posting. There will be more, unfortunately.
I think the DOJ has to have probable cause, and with LTS, if they start cooperating, then they can delay the justice they deserve. These people going down with the DOJ were wined and dined by Hewitt at this Beach home. Man, don’t be friends with those clowns.
I am glad I was a failure in “their” eye. Dodged that bullet.
The worst part of this is Liberty gets their territory back with some legitimate clients to pawn off on the next sucker. They make double, maybe triple the money on imaginary “locations” based on streets bordering north, south, east, and west. All there in a town near you so you can spill your blood, sweat, and tears for someone else’s gain.
Let this be a WAKE UP call to potential investors. If you ignore us, you will pay dearly! At the hands of your so called partners, Liberty.
John loves you!
You have an office on the N.E. corner of 80th and Wadsworth Blvd. Arvada, Colorado . You have a young man bannering your services on Wadsworth Blvd. just north of 80th Ave. I pass him every day going to the bus stop just north of him Each day he tries to start a conversation with me , addressing me as “buddy”. “Hi buddy”, ” Hey buddy , won’t you stop and talk, Your going to miss your bus buddy, you better hurry up. I ‘ve gone into your office and complained about him. This did no good. I know by city ordanances he isn’t supposed to be starting conversations with the public.
What is really scary is how cozy Hewitt and his clowns are getting with the DOJ. If this doesn’t smack of coercion, I don’t know what does. As I said before, Hewitt has no qualms about throwing any of his franchisees under the bus. Interesting that the DOJ finds themselves in bed with these idiots. It makes you wonder who investigates whom. Too bad none of us had the presence of mind to record the late night training sessions that were put on to show us how to make fraudulent tax returns. That would make the government a little nervous about their new friends. It is also no accident that Liberty does not lose a case in that Federal 4th circuit court in VA.
What I find humorous is that there are still some institutions willing to invest money in this scam. Just goes to show, there are those still willing to drink the cool aid.
If franchisee’s colluded with Liberty to commit fraud, you would think both would be criminally charged. The franchisee for committing the fraud and the franchisor for being the conduit.
It is like the bank robber and the driver of the get away car. Both are involved in the crime.
Too many have posted on this site as being eyewitnesses to being instructed on how to commit tax return fraud. Trust me, Liberty’s reputation with the IRS, the public, and franchisee’s is not good. Stay far away from them.
I’ve been away from Liberty for 7 years but on my way in this morning I had one of those flash backs to my first couple of seasons. I was thinking how current new franchisees are all gearing up on the bs the company is telling them about the second peak, encouraging them to staff up and for the second peak and get your wavers out. Many of them are counting on it to help save their season. Unfortunately most of us on this site already know how this story ends.
For those of you franchisees leaving the system even though Liberty has the no compete etc clause your clients will still follow you. When I closed I went to work for a firm and my clients followed me here. I have still have clients from my first year at Liberty. They have been with me for eleven years. 4 at Liberty and 7 years here. While my investment in Liberty was a mistake the client’s that I obtained while owning the franchise are still paying off.
Thats good to know, but there are two sides to most stories. Hopefully you did’nt sell your store and then take the clients with you. There are some ex-store owners who’ve done just that. One thing still important in this world is values. It would be great if those leaving just remember their problems are between the company and them.
If you sell a store at least be a man – or woman about it and leave what you sold.
Taking clients and records is stealing if you sold the business to someone else.
Corporate continues to screw all Maryland Zees. They let this franchisee in Baltimore commit fraud while they were making 19% off her revenues and now the whole state is paying for it because of the bad publicity it has caused now that she got arrested. The whole state is down about 30%. You would think they would do something to help all Maryland zees who have nothing to do with the fraud done by that zee. How can they sit there and let this happen. All they have done is hire a law firm to protect themselves. What about the MD zees?
I don’t think very many people can sell their stores. They just quietly fold and go out of business. Corporate has no interest in helping anyone sell an existing store.
@Keepyourword – Dude, very few people EVER sell a territory, so what you wrote is like a 5% chance maybe less. Most people go out of business just as Don’t be Fooled noted above.
The only people that stay with LTS are a very specific type and they don’t leave EVER. The average person who like having a relationship with their tax person will leave with that person no matter if the territory and/or store is sold.
^^^Don’t be fooled & Franchizee:
Exactly right. Great postings. How about the other way around? How about Liberty taking all of your pre-exisitng customers even though you could prove which ones were yours before you joined that hellhole for 5 years?
How about Liberty admitting to the news press that they call the IRS on their own zees? NOT just rogue zees. Also zees that make them mad. They do it to get even, even if the IRS can’t find a thing wrong with the zees books, they will keep digging until something is found no matter how small it is. After all, Liberty must be in bed with them paying them a pretty penny for info. on going after zees and taking the attention off of the real culprits—themselves :(
Altogether I had a freakin’ 14 year nightmare, including the mandatory 5 year contract. They WILL come after you no matter what. You have to be EXTREMELY vigilant when leaving. No matter how much I tried to leave, they kept pulling me back in. I cannot say enough how disgusting they were and are.
bill: If there ever is a class action lawsuit, I’m all in.
To the potential franchisees who are looking at Liberty as a potential business to run——-run alright. Run away as fast as you can and don’t look back. You’re welcome :)
Not only are the Zees in Maryland paying for the bad press, so are the Zees in the surrounding areas Virginia and Pennsylvania. Corporate has not reached out to any of the Zees to ease the pain.
You need to remember that last year John Hewitt, himself, praised what Vanessa Dickens was doing via a January conference call. He should be held accountable for promoting what Vanessa Dickens was doing. Maybe the Department of Justice should begin connecting the dots between Georgia, South Carolina, Maryland, Nevada, California and Tennessee. Once they begin to do this they will notice that there is a pattern and the key element between these cases is John Hewitt. I am not sure what constitutes Racketeer Influenced and Corrupt Organizations Act (RICO) for the Department of Justice. Most or all of these individuals have been used by John Hewitt on conference calls or for marketing training promoting what they were doing.
These conference calls are mandatory for all Zees to listen to by corporate. This type of behavior is being promoted and organized by John Hewitt.
Bingo NCHILLBILLY.
There is plenty of ‘behind the scenes’ investigating going on. I was interviewed by the DOJ and IRS over 3 years ago and they were on the ball and knew more information than I ever imagined.
There is NO QUESTION your post is spot on.
Why don’t all of us in the Baltimore and Washington DC areas including the suburbs and the whole states of MD, DE, VA hire a lawyer and sue the crap out of corporate. Can we all unite and get one lawyer that will file the lawsuit? It is ridiculous what they have done so far, which is cover themselves while we all bleed to death.
Admin, can you help us in any way or guide us to what we should do next?
Thanks
I’ll bet more trouble in 2017. Some franchisees still grossly overcharge customers and start season with last paystub. If that is not stopped, more trouble coming. I agree corporate turning in franchisees and that would be protecting company, not store owners. This is about what got out of control. Filing self employed is out of control but still small part of the tax business.
Vanessa Dickens destroyed her life and is taking down her preparers with her.
Unless the math is wrong, it was’nt worth it for the company. 19 percent of about $400,000 is eighty grand. Not worth it. I bet her defense will be she did’nt know was they were doing was illegal.
Admin,
Can you offer any help on legal actions against corporate in the state of maryland. They have 25% of their offices suspended by the State and the other 75% impacted badly by the bad publicity. Seems like someone should help these franchisees.
What’s happening with Liberty top Zees? Bablu the top entity for Liberty disappeared from the performance grid, both his NY and LA operations and his AD in Atlanta. They flaunt all the top producers so they can sell more territories and then years later the top produces get shut down by the DOJ for Fraud. Wow! What a scheme only could work in America on the taxpayers backs. Everything will just be hush hush for convention but things are tanking for John Screwitt.
Thanks for the info. Maybe there were money issues? Still it’s a big deal that he’s gone.
How did you find out about Bablu? Since convention of 2 years ago all the stars are gone.
Bablu, Steve Doletzsy, Mario Costanz, Baldeep Chawla, Vanessa Dickens.
Also, few years ago Annie Fuller and the guy out in Kentucky. What is going on?
Fraud never works eventually you get caught and things go south……
More good news!! John I Screwitt, must be SHIATTING himself!!
Liberty Tax Service Requiring 28 New York Area Locations to Cease Operations
Article
Comments (0)
FREE Breaking News Alerts from StreetInsider.com!
E-mail Address
Subscribe
StreetInsider.com Top Tickers, 4/10/2016
1. ICPT
2. CLVS
3. VRX
4. DEPO
5. GPS
6. AFOP
7. ABMD
8. SEAC
9. DLTH
10. RT
Top News
Most Read
Special Reports
Top 10 News for 4/4 – 4/8: Treasury Stomps-Out Pfizer, Allergan Deal; Tesla’s Model 3 is En Fuego; Valeant Sees Life
Wall St. ends higher but indexes post weekly losses
QLogic Corp (QLGC) Said to Tap Qatalyst to Explore Options, Including Possible Sale
Westar Energy (WR) Working With Guggenheim on Sale After Attracting Interest – Bloomberg
Synergy Pharma (SGYP) Said to be Exploring Sale – Source
Electronic Filing Services Have Been Suspended
April 10, 2016 12:51 PM EDT Tweet Share E-mail
VIRGINIA BEACH, VA — (Marketwired) — 04/10/16 — Liberty Tax Service, a subsidiary of Liberty Tax, Inc. announced today that 28 of its franchised locations in the New York City area have been instructed to cease preparing and filing tax returns for the remainder of the 2015 tax filing season. The offices involved were licensed to one franchisee and Liberty took this action after learning that the franchisee operating those offices had its electronic filing privileges suspended by the IRS.
Liberty made the decision even though the Company could have continued to serve customers until the April 18th tax filing deadline by taking over operation of the locations. The Company decided it is in the best interest of customers, the Company, other franchisees and the integrity of the tax preparation process to focus on only serving customers who have already filed.
According to Jim Wheaton, Liberty Tax Chief Compliance Officer, “As of today, we have determined that these offices are not able to provide the level of service required to meet the Company’s standards. We have decided that our operations in the affected offices should be limited to assisting customers who are waiting for refunds or who have questions about returns that were filed prior to today.”
Instant Tax Service part 2 the Feds have to be on verge of shutting this scam down!
I think those were some high volume offices they just shut down. Looks like major damage control for Liberty corporate.
What happened to Steve Doletzsy? When did he leave?
Yes it’s a big deal. You can bet he’ll be charged next year mid tax season. It’s over for this year. At least they closed those offices. They should leave them closed for at least one year. Need major overhaul and re-training required for all franchisees. Company just has to take the lumps if it’s gona survive. A whole lot of jumping ship before 2017.
Sure, wait until the last week or so to do this. Will Liberty pay back the royalties received so far this year from these locations. If they don’t, they are an accomplice or working with the IRS. Either way, not a company you want to be associated with.
How do you spell Liberty? FRAUDS!!
By my count that makes 65 offices closed down this year. This makes the 3rd year that office closures have increased. We now have office closures in Florida, Georgia, South Carolina, Maryland, New York, Michigan, Nevada, and California.
I would have several questions:
1. When will the IRS/DOJ connect the dots, and investigate corporate, to many locations are shutting down for this to be a couple of bad apples?
2. When will the legitimate operating franchisee’s sue corporate for not protecting the brand name? If I still had my offices, I would be worried about the “Liberty Tax Service” name.
3. Can Liberty survive these problems? It is funny for those who can remember how John was stating that he had programs in place to find fraudulent returns. What happened to Jackson-Hewitt (top franchisees in Oklahoma were shut down for fraud), could not happen to Liberty. It is interesting that major fraud issues with tax franchisee’s happened where the Grand-daddy of the tax industry was a major player.
^^^ Out and Glad:
To answer your first question: The IRS/DOJ have already connected the dots years ago. They are probably doing an extremely thorough research to make sure when they get their guy, he will be brought to justice and to jail and not pay off the legal team or settle as he has in many other cases.
Guest:
Major overhaul and re-training? Well that begins naturally with the Corporate office. It matters what they teach in and OUT of the classroom, in writing and NOT in writing. Since JTH has been doing this for years and getting away with it, he just brought it over to LTS and continued the fraud. The IRS/DOJ will catch up with him. Now they (JTH and his dumbo staff) are squealing on the individual franchisee offices because they are trying to keep the focus off themselves! :(
Out and Glad:
Question #3: Yes, one hundred percent accurate.
Question #2: My clients came to me because of ME! Not any Liberty Tax brand name. As far as I’m concerned, the Liberty Tax name is a huge joke. Do you know how many people laugh at the costumes and don’t really take it seriously as a professional national tax prep company???
Thank goodness I’m out. A most horrific nightmare I lived through for years. Now my life is back on track and I’m happier than ever to be away from the tax business altogether. It cost me a lot both personally and monetarily but I survived somehow. All I can say is DO NOT INVEST ANY OF YOUR PRECIOUS $$ INTO THIS COMPANY. BACK AWAY & DO IT YOURSELF OR LOOK FOR OTHER OPPORTUNITIES, NOT FRANCHISING AS A WHOLE BUT ESPECIALLY NOT THIS FRANCHISE. THE EXPERIENCE WAS UNBELIEVABLY STRESSFUL AND SO NOT WORTH IT IN THE END. I JUST WISH I HAD THIS WEBSITE AND PEOPLE LIKE ME TELLING ME TO BACK AWAY. I WOULD HAVE BEEN SO GRATEFUL. Do your due diligence and look at the headlines in various newspapers!!! Starting in Baltimore………..this company is and should be on it’s way down. Unfortunately they will be pulling innocent franchisees along with it.
One question I would like answered is a Franchisor responsible for Fraud if it supplies the software and support on which fraudulent tax preparation is conducted. If it can monitor types of returns processed and provides the vehicles for all of the refunds via Bank Products should it be held liable for some sort of wire fraud? If you process high perfentage of clients from a cluster of offices with Sch C EIC having hair salons and sitters and tax prep fees north of $600 per return and you as the franchisor know this and don’t stop this shouldn’t you also be held jointly responsible in the fraud. Its a conflict of interest because your life blood is banked off of tax prep fees and royalties. If you audit this yourself you cut off your sources of income. The IRS has to be tougher on the Franchisor and make them be held at the same or if not higher level than the franchisee. Until this is done the Fraud will continue.
I would think that the franchisor is as responsible as the franchisee would be when it comes to fraud. Liberty tax has actively aided and assisted its franchisees in committing these frauds and should be held accountable. Perhaps the reason that the DOJ has not taken any action is because Liberty is actively ratting out its franchisees. Ironic that they are the ones teaching those same Zees how to maximize fees through dummy Schedule C’s such as handyman businesses, babysitters and other schemes. Its kind of like lobbyists and congress: the lobbyists write the laws for the congress that are favorable for their clients.
I’m still convinced that there is a deeper dynamic in what Liberty is doing to defraud the government, and the government’s reluctance to put a stop to the abuse. It just seems that both sides of the law are in cooperation with each other and that John Hewitt stands to make a profit by abandoning his Liberty ship and leaving others (shareholders) to pay for the mess. Hewitt’s probably a citizen of some Caribbean island out there that has no extradition agreement with the US. This is coming in view of the substantial decline in share price. Its just entertaining to see how many investment institutions will be left holding the bag. Who cares?, its a tax write off anyway.
Latest news is a zee’s office having been raided with a search warrant by the IRS and computers seized from his office. Not sure if this is Bablu. If it was why would they not say former zee? Is there really more problems ahead?
Screwed..where did you hear about the raid?
Corporate email.
The IRS raided numerous Liberty Tax offices in LA California today.
John Balkis offices are the ones under raid by the IRS see social media on this. Too 1 and 2 franchisees go down within a week! Who is next? How about some of the Liberty Corporate stores? John Hewitt has John Balki out front selling territories and stories of success on promotional videos, I wonder if they will teach future Zees how to handle IRS raids after following Bablu and Balki sales pitches.
That was the guy I thought was commenting on this board as John Barrilla. I now wonder if it was him……
With the last raids since the beginning of the tax season, John has been eerily quiet.
I guess it’s over for this company. What happens if we change our names next tax season of all our offices and use different software. I understand corporate would probably sue us. Could we not have an easy counter suit, that the franchisor did not protect the brand nor due its fiduciary duty? Again, can we get together and figure this out and not let corporate keep screwing us? Admin can you please help us or guide us in the right direction? Appreciated it!
Guest it’s not over. There will be more during the off season. Its looking like the plan from IRS is to put a stop to bad returns. It might also be the ones that were closed telling the IRS that they don’t think they did anything wrong. Systematic problem. I expect to protect the customers I work for and to keep them. More stores will close and not reopen. It will clean up or people will jump ship.
http://gawker.com/dont-file-your-taxes-at-liberty-or-any-other-storefron-1771214600
Don’t File Your Taxes at Liberty (Or Any Other Storefront Chain)
Andy Cush
Yesterday 5:16pmFiled to: TAXES
109.6K
401
13
Don’t File Your Taxes at Liberty (Or Any Other Storefront Chain)
Image: Getty
Tax Day is Monday, America. I hope you filed your return already, and can spend the weekend enjoying the sunny weather, unstressed about your civic obligation to fill government coffers. If you haven’t, don’t worry: you still have three days. A word of advice, however: don’t file with Liberty Tax Services, which has seen an alarming number of stores shut down over alleged misconduct lately.
Last week, the nation’s third-largest tax-preparing company announced that it had asked 28 of its New York City area locations to stop preparing and filing returns for the remainder of the 2015 season, citing offices that were “not able to provide the level of service required to meet the Company’s standards.” A few weeks before that, in Baltimore, nine people associated with multiple Liberty franchises were indicted for allegedly targeting people in homeless shelters and drug rehab centers and encouraging them to file fraudulent returns. That alleged fraud is apparently indicative of a larger problem in Maryland: officials recently announced they are no longer accepting returns from 23 Liberty locations in the state. And federal authorities have asked courts to shut over a dozen Liberty locations in Michigan, California, and South Carolina for allegedly preparing fraudulent returns over the last year.
Just yesterday, reports on social media surfaced, with photos at one location, of multiple raids on Liberty Tax Services stores in Orange County, California. John Balkhi, a Liberty franchisee who operates one of the reportedly raided locations, told me that his stores remained in operation, but would not confirm or deny that they had been investigated by law enforcement. Balkhi directed me to a Liberty Tax Services corporate spokesperson, who did not return a request for comment on this story. (Neither the IRS nor the Department of Justice responded to Gawker’s requests for comment.*)
Don’t File Your Taxes at Liberty (Or Any Other Storefront Chain)
Even when tax preparation chains like Liberty aren’t committing outright fraud, you’re probably better off avoiding them. An article published by the Atlantic yesterday, which draws on research from Johns Hopkins University and the Brookings Institute, does a good job explaining how these companies can prey on the poor: basically, by setting up shop in low-income neighborhoods, preying on their insecurities about the IRS, and gouging them on fees. According to the research, chain stores charge fees for as much as 25 percent of a filer’s Earned Income Tax Credit, a tax break designed to fight poverty.
It’s a national shame that filing one’s taxes in the United States of America is so hard that most people can’t do it alone. But until Donald Rumsfeld gets his way, this is the tax code we’re stuck with. If you can afford it, hire an accountant or an enrolled agent to do your taxes for you rather than walk into a chain.
If you can’t, there are free options: For people who make less than $62,000 per year, IRS offers software called FreeFile, which is basically like an alternative to TurboTax, except you don’t have to pay anything to use it. There’s also an IRS program called VITA, which offers volunteer in-person tax preparers for people who make less than $54,000, are disabled, or speak limited English. It costs you nothing, and you’re a lot less likely to have a fraudster filing for you.
Update – 8:59pm
*Thom Mrozek, Public Affairs Officer for the U.S. Attorney’s Office for the Central District of California told Gawker, “Federal agents yesterday executed a series of search warrants in Southern California. Those warrants are under seal, so I cannot provide any substantive comment on the matter being handled by IRS Criminal Investigation.”
http://www.blackenterprise.com/small-business/tax-return-filers-beware-of-fraud-among-liberty-tax-service-preparers/
The article is just a rehash of events bit the title and the publication are note worthy.
And the hits keep coming.
http://financialjuneteenth.com/beware-many-liberty-tax-service-locations-fraudulent/
http://pilotonline.com/business/consumer/liberty-tax-franchises-face-federal-attempts-to-shut-them-down/article_abf88bd4-4f54-58fb-aaa9-e49822dd2e0d.html
And the hits keep coming.
http://financialjuneteenth.com/beware-many-liberty-tax-service-locations
http://pilotonline.com/business/consumer/liberty-tax-franchises-face-federal-attempts-to-shut-them-down/article_abf88bd4-4f54-58fb-aaa9-e49822dd2e0d.html