Instant Tax Service Accused Of Fraud
CHICAGO (CBS) -- As the Tuesday midnight tax filing deadline looms, many people are turning to tax preparers who promise rapid returns. But as CBS 2's Mai Martinez reports, the Better Business Bureau has a warning about those services, and one in particular doing business in the Chicago area.
Rita Vigil considers herself to be financially savvy, so it's hard for her to believe she lost hundreds of dollars from her tax refund – without any explanation from Instant Tax Service, the company that filed them.
"I work hard for my money, and I don't like to be taken advantage," Vigil said.
But that's exactly what Vigil says happened when she chose an Instant Tax Service location on Cicero Avenue, after hearing a radio announcement promising $1,000 to people filing their taxes.
"Because of my need of the $1,000, I went in there," she said. "I wanted to pay off a loan that I didn't want to pay an extra month for, so I wanted to hurry up and pay the loan off."
But she didn't get the $1,000 she was promised, nor did she get an explanation why.
When she finally got her tax refund, it wasn't $7,178 she was promised.
"When I calculated the check, it was a $589 difference," she said.
Vigil said she felt she was robbed.
Representatives for Instant Tax Service referred questions to its corporate headquarters in Dayton, Ohio, which is fielding complaints from across the country.
The Better Business Bureau said about 800 complaints have been filed against the company.
"The first thing to do is check out – with the Better Business Bureau – the company itself," said BBB President Steve Bernas. "Secondly, be very wary of refund anticipation loans."
Bernas said people often don't realize what they're signing up for when they seek a refund anticipation loan when they file their taxes, and that can be a costly mistake.
"It's not your money. It's actually a loan, so you're going to pay upwards of 30 to 40% APR, which can equate to thousands of dollars that you're just losing," he said.
The U.S. Department of Justice has file a federal lawsuit to shut down Instant Tax Service, for intentionally preparing and filing fraudulent tax returns, and for charging large fees for the process – sometimes as high as $1,000.
Calls to ITS's corporate headquarters were not returned.
As for Vigil, she said she's learned her lesson, and next year she'll file her taxes on her own.
