Ohio taxpayers complain returns filed without permission, exorbitant fees charged

Exclusive 5 On Your Side Investigation

CLEVELAND - An exclusive 5 On Your Side investigation reveals Ohio taxpayers are stuck with exorbitant fees after discovering their federal tax returns were filed without permission.

In some cases, taxpayers complained they were charged up to $900 in fees by local tax preparers for services that should have cost a fraction of that amount.

Tiffany Abrams said her federal taxes were filed without permission after applying for a so-called "holiday loan" just before Christmas. Abrams said the tax preparer used a December pay stub to verify income for a $200 loan and charged her a whopping $861.

"I never authorized. No," Abrams said. "I have my W-2s with me. I never took them my W-2s."

Another taxpayer grew so angry over excessive fees she called 911 from a parking lot outside the preparer's office.

Markeita Holley said the company refused to give her tax documents they prepared, so she grabbed them and tried to leave. She called 911 for help when an employee at the company took away her car keys to prevent her from leaving.

The tax service also called 911, claiming Holley had stolen the tax returns.

Maple Heights police wound up surrounding Holley's car with guns drawn.

"They're screaming, ‘Put your hands up, put your hands up!'" said Holley, who did not have a gun.

No one was charged, but Holley insists she never authorized her taxes to be filed. She said the company informed her that since she obtained $200 loan, she was obligated to file her taxes with them.

"I didn't have a choice," Holley said, "and she didn't tell me that from the start either."

Our investigation found similar complaints have been filed with the Cleveland Better Business Bureau. Records at the Ohio Attorney General's office also show 218 complaints against tax preparers in the last two years.

Attorney General Mike DeWine said his office will pursue unscrupulous tax preparers.

"Taxpayers are charged $800 to $900 just for the preparation, a preparation that should not cost anywhere near that," DeWine said.

Meanwhile, the U.S. Department of Justice has launched a massive crackdown on fraudulent tax preparers across the country, shutting more than 30 offices.

In Ohio, federal prosecutors have shut down Dayton-based Instant Tax Service with a civil injunction and a lawsuit is scheduled to go to trial in May. Charges in the case included "deliberately targeting low-income taxpayers" and "charging unconscionably high and deceptive fees."

Instant Tax Service denies the allegations.

Complaints by Abrams and Holley are not included in the federal case against Instant Tax Service, but mirror similar business practices.

Both the Cleveland Better Business Bureau and the Ohio Attorney General's Office are urging taxpayers to report similar complaints.

The Internal Revenue Service also advises consumers to consult its website for tips to protect against fraudulent tax schemes: http://1.usa.gov/14RNcjC

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