Media contact: Janet C. Hart, APR, CFEE (704) 927-8617 office
Three local branches of Instant Tax Service and their owner have been fined $60,000 for alleged unscrupulous practices and improperly filed returns, and are forbidden from engaging in deceptive business practices, the state attorney general said.
The Instant Tax Service branches are on Freedom Drive and West Boulevard in Charlotte, and East Franklin Boulevard in Gastonia. Owner Eden Kidane was also named as a defendant in the consent judgment filed Friday afternoon in Wake County Superior Court.
N.C. Attorney General Roy Cooper originally shut down the three businesses in March, after customers said Instant Tax Service filed their tax returns without their permission. The company was also accused of having charged fees of $700 to $800 for filing simple tax returns, without disclosing the fees beforehand. That work would cost only $200 at a national tax preparation company, officials said.
“Instant Tax Service ran television and radio advertisements in the Charlotte area starting in December 2011, offering loans of up to $1,000. People who went to Instant Tax Service and received loans for $50 or $100 reported that the company then filed tax returns without their permission,” Cooper’s office said, in a statement.
Kidane did not admit guilt as part of the consent judgment. “Defendants deny liability for all claims and causes of action against them in this litigation and have entered into this compromise settlement for the purpose of avoiding litigation,” the order read, in part.
The court enjoined Kidane and Instant Tax Service from making false or misleading statements to consumers, filing tax returns without authorization, filing tax returns using paystubs instead of a W-2 form, using false dates on forms, and creating false W-2 forms.
Kidane and Instant Tax Service are also required to disclose their fees orally and in writing to customers prior to filing tax returns. Kidane and her businesses are also forbidden from misrepresenting loan terms, amount, and eligibility, and can only offer refund anticipation loans, not payday loans or other cash advances.
The company’s $60,000 fine is payable in two portions, with the second $30,000 due in February 2013. The money will be used for investigative costs, consumer restitution, and other purposes at Cooper’s discretion, according to the order.
The Attorney General’s office received complaints from 116 customers about the business, officials said, and the Charlotte Better Business Bureau said the business received more than 500 complaints last tax season.