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AG Cooper goes after Charlotte tax preparation scheme

Release date: 3/23/2012

Consumers complain taxes filed without their permission and with hefty fees

Raleigh: Three Instant Tax Service locations in the Charlotte-area that filed consumer’s taxes without their permission, filed inaccurate tax returns, charged excessive fees, and failed to disclose fees for refund anticipation loans have been temporarily banned from offering illegal tax services in North Carolina, Attorney General Cooper announced today.
 
“Filing someone’s taxes without their permission is not only wrong but it’s against the law,” Cooper said. “Consumers who step up to complain help us move quickly to stop these kinds of deceptive practices.”
 
Late Thursday, Wake County Superior Court Judge Lucy Inman agreed with Cooper’s request for a temporary restraining order against Instant Tax Service and owner Eden Kidane of Charlotte. The locations owned and operated by Kidane were located at 2712 Freedom Drive in Charlotte, 1520 West Boulevard Suite J in Charlotte and 316 E. Franklin Boulevard Suite A in Gastonia.
 
Cooper filed suit against Instant Tax Service this week. He is asking the court to permanently ban the company from offering illegal tax preparation services, refund anticipation loans and instant loans and to order the company to pay refunds to consumers. 
 
As alleged in Cooper’s complaint, Instant Tax Service ran radio and television advertisements in December 2011 in the Charlotte area offering loans up to $1,000. According to the ads, all consumers needed to apply for one of these “instant” loans was a recent pay stub. Many consumers went to Instant Tax Service received loans for $50 or $100 but did not give permission for their taxes to be filed. The consumers later discovered that Instant Tax Service had filed their taxes returns based on the information from their pay stub.
 
According to the lawsuit, consumers who did give Instant Tax Service permission to file their tax returns complained that the company did not disclose its fees. Many were charged fees of $700-$800 for uncomplicated returns that would have cost around $200 if done by other national tax preparers. Consumers who went to Instant Tax Service to apply for refund anticipation loans also complained that they were promised funds within 24 to 48 hours but didn’t get them that fast and sometimes didn’t get any funds at all.
 
Consumers who complained to the Attorney General’s Office about the company 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 about refunds. Other consumers who did receive refund checks from Instant Tax Service claim they were returned for insufficient funds, the lawsuit alleges.
 
Cooper’s Consumer Protection Division has received six written complaints about the Instant Tax Service locations in the Charlotte-area and 130 consumers have called about the company this week. The Better Business Bureau also forwarded 22 complaints to Cooper’s office. According to an affidavit from Maryanne Dailey, Senior Vice President of the Charlotte Better Business Bureau, Instant Tax Service owner, Eden Kidane disclosed that she has received over 500 complaints this tax season about her Instant Tax Service locations. 
 
“Many families are stretched thin and their refund checks can’t come fast enough,” said Cooper. “I urge consumers to think twice before you opt for an “instant” or “rapid” refund that may take a big bite out of your actual refund.”
 
For more information and consumer tax tips, visit www.ncdoj.gov
 



Media contact:  Noelle Talley (919) 716-6413