The Poor Are Targeting Tax Preparers With High Fees

Tax Preparers Targeting Poor With High Fees

In December, they begin showing up in empty storefronts in neighborhoods where empty storefronts are easy to come by. Cars with phone numbers brightly displayed on the doors roll down the streets, and signs pop up along the sidewalks promising fast money.

For millions of low-income Americans, tax season means the biggest one-time influx of money all year. It also means the annual sprouting of commercial tax preparers: some of them big-name franchises, some mom-and-pops and some, as 20-year-old Brittany Dixon discovered this year, shockingly expensive.

Ms. Dixon, a supermarket cashier and college student, took her tax documents — a W-2 form and some education expenses — to the first place she saw, in a storefront near the interstate. The preparation took about a half-hour, and Ms. Dixon was told the amount of her refund — and that she would be charged nearly $400, about a quarter of the total, in fees.

She told the preparer not to file, she said, and found a service willing to do her taxes at no cost. But by then, the first preparer had already filed and taken its cut. “That was my whole car note,” Ms. Dixon said.

The Poor Are Targeting Tax Preparers With High Fees TAXES1-articleLarge

The Poor Are Targeting Tax Preparers With High Fees TAXES1-articleLarge

There are as many as 1.2 million tax preparers nationwide, and reports have shown that a large majority of customers felt they were well served by their tax preparers. But with almost no regulation in the tax preparation industry and a tax code that is forbiddingly complex, the billions flowing into low-income households this time of year, primarily in the form of the earned-income tax credit, present a ripe target for the unscrupulous.

Stephen Black, the director of Impact Alabama, a nonprofit based at the University of Alabama that trains college students to provide free tax help, said his volunteers routinely saw low-income taxpayers who had paid hundreds of dollars to commercial preparers, often for inaccurate returns, and were often unaware that the prices are excessive. “Exorbitant pricing is rampant,” he said.

Mr. Black and many consumer advocates have been pushing for years for more oversight of tax preparation, describing a range of problems from excessive fees to incompetence to outright fraud.

More: http://www.nytimes.com/2014/04/08/us/tax-season-brings-big-refunds-and-preparers-clamoring-for-a-slice.html?hpw&rref=us
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Anarcho-Capitalist, AnCaps Forum, Ancapolis, OZschwitz Contraband
“The state calls its own violence law, but that of the individual, crime.”-- Max Stirner
"Remember: Evil exists because good men don't kill the government officials committing it." -- Kurt Hofmann

The Poor Are Targeting Tax Preparers With High Fees

The Poor Are Targeting Tax Preparers With High Fees

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