Tax nightmare: Preparers file your taxes without permission, hold refund check ‘hostage’

Print
Email
|

by Jeremy Rogalski / Investigative Reporter

khou.com

Posted on February 14, 2012 at 11:00 PM

Updated Thursday, Feb 16 at 12:51 PM

HOUSTON – Imagine going to file your taxes, but somebody already has done it. That’s right, without your permission, even without your W-2 form. The I-Team discovered it’s a growing trend, and the culprit is the very person you trust at tax time.

Instead of cashing in on his tax refund, headaches and hassle steamrolled Greg Johnson.

“I’m pissed. I’m beyond furious you know,” Johnson said.

Furious because someone, somehow, already had used his Social Security number to file a return, putting his expected $3,500 refund on hold.

"This can’t, this isn’t happening to me, like no, no, no way,” Johnson said.

Turns out, to sort it out with Uncle Sam took months of his time.

So had a stranger stolen his identity? A computer hacker perhaps?

No.

“They said it was a David Haynes,” Johnson said.

It was tax preparer David Haynes—the same man who did Johnson’s taxes one time, but six years earlier, and never since.

So what was going on?
 
“’Oh, well, we just accidentally submitted yours,’” Johnson said of Haynes’ explanation.

Johnson said Haynes also told him his office was using old returns for practice. But even stranger, according to Johnson, Haynes still wanted him to accept the bogus refund. And on top of that, wanted his fee--$500—for preparing it.

“That was just the straw that broke the camel’s back as they say,” Johnson said.

But turns out, he wasn’t alone.

“I mean it’s stressful,” Stacy Lane said, of the same situation that happened to her.

And it took even longer to untangle the mess.

“For eight, nine months I didn’t know anything,” Lane said. “Finally, the IRS called me and said ‘Mr. Haynes did this.’”

Once again, filing a tax return without permission, and once again, demanding a $500 fee for it. And one more thing: Lane said Haynes even botched her name on the paperwork.

“These are my signatures that he forged, he misspelled it twice, both of them are misspelled,” Lane said.
 
”If that’s not fraud, I don’t know what else you’d call it,” said Certified Public Accountant Ted Feher.

Feher sits on the ethics committee for the Houston CPA Society. He said there’s a right way to use old returns for practice.

“Legitimate preparers don’t do that,” Feher said. “You wouldn’t use a Social Security number, you’d put in all 9s,” he said.
  
And even if it was all just a mistake as Haynes claims?

“Guess what, if you’re going to make errors like this, you don’t belong in this business,” Feher said.

So the I-Team paid David Haynes a visit, but we didn’t get very far.

Haynes: “I want you out of here.”

I-Team: “Why is that?”

Haynes: “I want you out of here, out out.”
 
But the I-Team found another twist to consumers’ tax office troubles. Tamika Stubblefied went to an Instant Tax Service store in the 5900 block of Scott Street and applied for a refund anticipation loan.

“But the loan didn’t get approved,” Stubblefield said.

That was the end of it, or so she thought. A couple of months later, Stubblefield got a surprise as well.

“My Social Security number had been submitted for a return already,” she said.

She claimed it was submitted by the same Instant Tax Service location, without her consent.

“In no way, shape, or form was I ever advised that they were going to file my taxes for me,” Stubblefield said.
 
But as a single mother of three needing her refund, she chose not to fight Instant Tax. But then came the knockout blow—a whopping $679 fee to process her return.

I-Team: “679?”

Stubblefield: “Yeah.”

I-Team:  “You’re thinking what?”

Stubblefield: “I’m thinking they screwed me, big time.”

“We see this egregious activity happening over and over again,” said Jackie Lynn Coleman, Executive Director of National Community Tax Coalition.

It is a network of more than 2,000 members supporting free, not fee-based tax preparation services. Coleman said shady practices in the industry often are a by-product of sales pressure.

“I think it’s really about them trying to earn additional dollars,” she said.

Whatever the motive, the I-Team discovered Instant Tax Stores in the states of New York, Georgia and North Carolina are currently under investigation. In Missouri, IRS agents raided eight Instant Tax locations for filing consumers’ taxes without their permission.

Back in Houston, there’s no word so far on any IRS probe. When the I-Team visited the Scott Street store, we were asked to leave by an unidentified man.

“I was asked to make sure that you stop the interview, so could you all please, could you all please exit the premises, we greatly appreciate your cooperation,” he said.

Now we also called the Ohio headquarters of Instant Tax Service which is the 4th largest tax preparation franchise in the country. They had no comment and told us that they prefer to refer any issues or complaints back to the local store that has been accused. Financial reports claim that each store pays the Ohio corporation 20 percent of its income and a franchise fee of $35,000.

Finally, we did speak with David Haynes of HFC Tax over the telephone.
He told us that he did file Greg Johnson’s and Stacy Lane’s taxes without their permission, but again, did so accidentally.

But Haynes also said that “anyone that comes into our tax office and fills out some paperwork” automatically gives HFC Tax their permission for the business to file their taxes.

He also said that the real reason for Johnson and Lane’s complaints was that they didn’t like the size of their refunds for that tax year of 2010.

Thanks to Dan Parsons and the Houston Better Business Bureau for their help in researching this story.

Print
Email
|