Woman moves to metro Atlanta, finds her tax prep bill more than doubles

By By Harry Samler

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    DOUGLASVILLE, Georgia (WANF) — Marion Scott has been going to Liberty Tax for eight years. She said she’s never paid more than a couple hundred dollars for her tax return and said her returns are fairly simple.

“Simple W-2′s,” Scott, a software IT consultant who files her returns in several states, said. “I’m single; no dependents; no itemizing, so it’s straight filing.”

Scott used the same tax preparer for years, but that was in Minneapolis. When she recently moved to Douglasville, her tax preparation estimate more than doubled the service fee to $881 plus a $50 filing fee, with no explanation on the invoice other than the service fee.

“Something’s not right….what did you put in my taxes that warrants this much money,” Scott questioned.

When she complained about the fee, the preparer called a manager who offered to reduce the service fee to $400.

Liberty Tax Service is one of the largest tax preparation companies in the U.S., and many of its locations operate as independently owned franchises.

Liberty Tax Service, headquartered in Virginia Beach, Virginia, has an F-rating with the Better Business Bureau and is being sued by The District of Columbia’s Attorney General in Washington, D.C.

“The District seeks to hold Liberty Tax accountable for misleading District tax-filers—especially low-income tax-filers—with deceptive offers of upfront cash that are secretly offset by the extra charges that Liberty Tax instructs it franchisees to charge to the tax filers who receive the cash,” the office of the Attorney General wrote in the lawsuit.

In 2019 the U.S. Justice Department settled with Liberty Tax Service and the company.

“To refrain from specific acts, enact enhanced internal compliance controls regarding the detection of false tax returns, and pay for an independent monitor to oversee Liberty’s compliance with the proposed court order,” the United States Justice Department said in a statement.

Atlanta News First is not discouraging potential customers from using Liberty Tax Service, but here some takeaways from this story.

Asking your tax preparers about their qualifications and terms if they make mistakes on your return is essential.

Ask your preparer if they are an IRS “enrolled agent.” According to the IRS, “an enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.”

Atlanta News First Investigates reached out to the Douglasville location’s owner and have not received an official response when this story was published. We did however receive a response from national Liberty Tax management.

While most of our offices are independently owned, all Liberty Tax offices must fully train their tax preparers to meet both federal, state, and local regulatory requirements for paid tax preparers. We, therefore, provide a robust Tax School training program to all our Liberty Tax offices to train their preparers. Our Tax School is designed for Liberty Tax preparers to ensure they have the necessary skills to prepare most tax returns. Students in our Tax School are guided through all the basics of filing status, dependents, deductions, credits, due diligence requirements for paid tax preparers, and even small business returns. Liberty Tax also requires our franchised owners and preparers to pass an annual certification course that focuses on taxpayer information security, compliance with federal rules for paid tax preparers, and recent tax changes. In total, these courses provide our tax preparers with the best opportunity to become trusted tax professionals for our valued customers.

In addition to the robust tax training we have for our tax preparers, Liberty Tax maintains a robust compliance program that helps ensure all franchised offices meet Liberty Tax’s high standards for tax preparation services. Over the last three years, we have made several key investments, both in infrastructure and talent, to ensure we meet and exceed all regulatory requirements designed to prevent Liberty Tax offices from submitting false or fraudulent returns to tax authorities. With the structures and processes Liberty Tax has built and the strength of our partnership with our franchisees, Liberty Tax is better poised now than ever before to prevent fraud from entering our system. We believe compliance is vital to maintaining trust with all our stakeholders, including our customers. – David Dulaney, Senior Vice President Liberty Tax Service

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