Tax Prep Companies in Hot Water

These Tax Prep Companies Are in Hot Water
  • July 15 was the final day to file taxes after the Trump Administration extended the deadline. 
  • Americans who filed refunds after April 15, will also get an interest payment.
  • Taxpayers who made under a certain amount were able to file using the IRS Free File tool. 
  • In 2016, a study found tax preparers cost low-income taxpayers approximately $1.75 billion in Earned Income Tax Credit. 

(NewsReady.com) – When Americans walk into a tax-preparation company they expect a certain level of honesty. Unfortunately, for many, that’s not what they received from five major tax-filing corporations, according to one state. In fact, the businesses are being accused of intentionally hiding information from taxpayers in order to enrich themselves.

Sleazy Business Practices

On July 15, the New York State Department of Financial Services (NYSDFS) released a report detailing allegedly sleazy business practices by five major tax-filing companies. Authorities are accusing the companies of “deliberately” hiding the IRS’ Free File Program from taxpayers who earned less than $69,000 from preparing and filing their paperwork for free. The corporations on the list are:

  • Drake Enterprises
  • Intuit (which owns TurboTax)
  • H&R Block
  • TaxHawk
  • TaxSlayer

The Jig Is Up

The investigation was sparked by a ProPublica report. According to a 2019 article, Intuit was able to hide TurboTax Free File, which uses the IRS’ program, by adding code to its site that directed search engines to not list the option on the search results.

ProPublica discovered the issue after the organization asked its Twitter followers about their own experiences filing taxes. One user, Larissa Williams, responded with a screenshot pointing out the code.

Cheating Customers?

If this is true, that means a countless number of customers may have been cheated out of their hard-earned money because their tax-preparer deceived them. That would be an incredible breach of trust for not just the people who were eligible for the Free File program, but also others who used the companies’ services. Now those people might be rightfully questioning whether or not they’ve been the victim of some scheme.

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