Local tax prep firm to pay $60,000 fine, change filing policy - WBTV 3 News, Weather, Sports, and Traffic for Charlotte, NC

Local tax prep firm to pay $60,000 fine, change filing policy

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CHARLOTTE, NC (WBTV) -

Three Instant Tax Service locations that filed people's taxes without their permission and charged excessive fees must change their ways and pay $60,000, thanks to a court order won by Attorney General Roy Cooper.

"Misleading consumers and then overcharging them is no way to do business," Cooper said.  "We will continue to work to stop bad practices and win money back for consumers."

Under a consent judgment approved Friday by Wake County Superior Court Judge Donald Stephens, Eden Kidane and the three Instant Tax Service branches that she owns in Charlotte and Gastonia must change their practices and pay $60,000 for consumer refunds and consumer education and enforcement efforts.

The three Instant Tax Service franchises are located at 2712 Freedom Drive in Charlotte, 1520 West Boulevard Suite J in Charlotte and 316 E. Franklin Boulevard Suite A in Gastonia.

The judgment permanently bars Kidane and her stores from misleading consumers, filing tax returns without consumers' authorization and filing tax returns using a paystub instead of an actual W-2.  Kidane's Instant Tax Service locations must also disclose to consumers, both orally and in writing, all fees for services, and must post fees where all potential customers can see them.

In addition, the defendants are not allowed to make any paystub, holiday or instant cash advance type loans, and they may not misrepresent the terms, amount, eligibility, timing or cost for any Refund Anticipation Loans they make.

In a statement to WBTV Monday, Kidane said, in part, "I have consistently denied the allegations and accusations brought by the Attorney General, as well as any intentional wrongdoing by my business."

Cooper first filed suit against Instant Tax Service in March after hearing from consumers about problems with the company's tax preparation work, and quickly won a temporary court order to halt the problem practices.  A total of 116 consumers filed complaints about the company.

Instant Tax Service ran television and radio advertisements in the Charlotte area starting in December 2011, offering loans of up to $1,000.  According to the ads, consumers needed only a recent paystub to apply for one of these "instant" loans.  People who went to Instant Tax Service and received loans for $50 or $100 reported that the company then filed tax returns without their permission.  Instant Tax Service often charged consumers fees of $700-$800 for work that would have cost around $200 if done by other national tax preparers. 

Sharon Mitchell says the convenient location and promise of quick cash drew her to Instant Tax Service last winter, but it didn't take her long to regret her decision.

"People work too hard for anybody to be taking their money from them," said Mitchell.

She says Instant Tax Service on West Blvd. paid her only a fraction of what she should have received as a refund. She says It took her a month and a half to get any money back from the company at all. Mitchell still has all of her paperwork and is hoping to file a complaint and attempt to get some money back.

"This year, they don't have to worry about me. I will never come back here., And if anybody's got sense they won't come back here," said Mitchell.

Other customers said that representatives at Instant Tax Service locations would not answer telephone calls and made consumers stand outside of the office for hours without answering their questions. 

"Many of us need a little help at tax time, but do your homework before you pay anyone to do your taxes," Cooper warned.  "People who work on your taxes will have access to your personal financial information, so check them out thoroughly."

A spokeswoman for the Attorney General's Office said it isn't too late to file a complaint. Customers who think they were overcharged or misled can call 1-877-5-NO-SCAM toll-free to report a company.

To file a complaint or get consumer tips, visit www.ncdoj.gov.

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