Instant Tax Service Sued For Fraud

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A popular tax service is being sued by the federal government for tax fraud, Consumer 10’s Kurt Ludlow reported Friday.

The U.S. Department of Justice was suing Instant Tax Service for allegedly using false and deceptive means to lure low income customers. The company then filed taxes without their knowledge or permission, according to the Justice Department.


Columbus resident Michelle McClure said that she received a loan and a surprise a month later when she filed her income taxes, Ludlow reported.

“There was an e-mail that came back to me and said the Social Security number for this preparer has already been filed. So, I’m wondering, how can that be?” McClure said.

McClure said that Instant Tax Service filed her taxes without her knowledge or approval, making up numbers on the tax forms and charging her $1,000.

The Ohio Attorney General has received 114 complaints against Instant Tax Service dating back to 2006. The Better Business Bureau has received hundreds of complaints nationwide.

“Consumers are alleging that their taxes are being filed without their consent,” said Jody Thomas of the Greater Maryland BBB. “That’s very serious. Consumers are alleging that the amount of fees that they’re being charged was not fully disclosed. The fees are double and triple what they were quoted.”

McClure said that the company agreed to refund her money, and she was worried the Internal Revenue Service thought she was a crook.

“Like I had to have my 2011 tax returns amended, because of the mistake, because again, I didn’t want to be audited. I didn’t want it to come back on me as a penalty for filing a fraudulent tax return,” McClure said.

The Justice Department said that the fraud in five states amounts to $16 million.

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