Tax Company With 800 BBB Complaints Sued for Fraud

taxes 150x150 Tax Company With 800 BBB Complaints Sued for FraudSince 2009, the Better Business Bureau has received over 800 complaints about Instant Tax Service nationwide. Jody Thomas, Vice President of Communications for the Greater Maryland BBB told CBS News recently that “Consumers are alleging that their taxes are being filed without their consent…and that the amount of fees that they’re being charged was not fully disclosed. The fees are double and triple what they were quoted.”

The U.S. Justice Department says that over the past few years, they have “successfully criminally prosecuted four individual tax return preparers affiliated with ITS franchises in Ohio and Missouri.”

Now, the Justice Department says that five Instant Tax Service franchises in different cities engaged in persistant fraud and that company founder Fez Ogbazion knew about and ignored it. The DOJ  is seeking to shut down the company and those five franchises, saying they invented phony businesses, fabricated deductions, falsified filing statuses, claimed bogus dependents and disregarded rules for claiming the earned income tax credit.

Mr. Ogbazion says the taxes being filed without permission were an “honest mistake” and blames a switch in software companies.

 Avoid Becoming a Tax Fraud Victim

Never sign any document without carefully reading it first. Some ITS customers allege that when they complained about the company filing taxes without their permission, they were told they had signed paperwork. The paper was allegedly buried in stacks of loan documents—loans the customers were turned down for.

Always investigate before you invest. If a company has numerous complaints or a pattern of complaints, it may behoove you to be cautious.

Know that the IRS does not require a W-2 form for electronic filing, so companies don’t necessarily need this form to file your taxes for you.

Never agree to arrange for a third-party company to receive your tax refund. All checks should come to you, and you can then pay the company any fees that are owed.

Ask your tax preparer for an itemized bill. The DOJ says that some customers of ITS were charged “junk fees” without their knowledge–as much as $1,000 for 15 minutes’ worth of work.

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About Holly Doering

Holly Doering has worked for the Better Business Bureau Serving Eastern Washington, North Idaho, and Montana for half a decade. Her areas of expertise include the CORE Values Program (Character, Optimism, Respect, Ethics) for Teens and Charity Review as well as writing and editing. Prior to that, she has written for two newspapers, a local magazine, and taught English at the community college. She is the proud author of a short story in ZYZZYVA literary magazine and has had good luck publishing lots of poetry. Each year she rolls up her sleeves and wades into the autumn Nanowrimo writing madness and has several unfinished novels to her credit.