Choose Wisely: Tax Preparer Investigated For Taking Advantage of Low-Income Customers.

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Written by Chase Sagum | Last Updated June 26th, 2019
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With tax season just around the corner, it is important to take care when selecting a tax preparer. News of stolen identities and fraudulent tax returns isn't new. However, what happens when seemingly legitimate preparers perpetrate the fraud and those being defrauded are honest taxpayers?

A franchisee of Instant Tax Service is facing legal action for allegedly taking advantage of low-income taxpayers. A civil complaint filed by San Francisco City Attorney Dennis Herrera alleges that Kebron Daniel defrauded unsuspecting taxpayers of as much as $1500 for small loans, or advances, on their expected tax refunds.

Running seasonal tax preparation services out of his check-cashing businesses, Daniel targeted low-income areas in San Francisco, Los Angeles, San Diego, Compton, and Inglewood, among others. He attracted clients with "quick refunds" and "small refund anticipation loans."

The preparer profited on its customers with the expectation that they would qualify for the Earned Income Tax Credit, a refundable credit created for taxpayers with low to moderate incomes. Once the return was processed, and the funds distributed, he would keep a large portion of the refund as fees, while the client received little to no additional money despite their refund being much larger than the initial loan.

When selecting a tax return provider, it is important to check the preparer's qualifications. All paid preparers are now required to have a Preparer Tax Identification Number. Check the preparer's history and service fees. Make sure the tax preparer is available after tax season if a problem occurs down the road. Review the entire return before signing and ask questions if you do not understand.   Most importantly, never sign a blank or incomplete tax return.

Take care and do your research when selecting a tax preparer. Do not become another victim this tax season.

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