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Attorney General's News Release

March 6, 2012

Attorney General sues national tax preparer MoneyCo USA for withholding taxpayers’ refunds

Jefferson City, Mo. – Attorney General Chris Koster today filed a lawsuit against a national tax preparer for multiple violations, including not returning refunds to taxpayers and misrepresenting how much it would charge to prepare a consumer’s taxes. Koster also offered advice to consumers on how to avoid becoming the victims of tax scams.

The Attorney General filed lawsuits against MoneyCo USA, and two of its St. Louis County franchises: Bedford-Benjamin Investments Company, d/b/a MoneyCo USA, 8955 Natural Bridge Road; and Randy Williams, d/b/a MoneyCo USA, 9918 Halls Ferry Road.

According to Koster, the MoneyCo USA defendants have allegedly violated Missouri law in multiple ways, including:

  • Failing to distribute IRS tax refunds to consumers;
  • Failing to provide consumers a copy of their tax returns and other documentation when services were provided;
  • Creating the false impression that consumers’ refunds would be deposited directly into consumers’ own bank accounts;
  • Concealing from consumers the fact that their refunds would be deposited directly into MoneyCo’s bank accounts;
  • Misrepresenting the total fees that MoneyCo would charge consumers for preparing and filing their taxes; and
  • Charging consumers fees and filing consumers’ taxes without consent.

Koster is seeking a temporary restraining order as well preliminary and permanent injunctions to ensure that all tax refunds MoneyCo receives are distributed to taxpayers within 48 hours of receipt. He is also seeking full restitution for consumers who have already been harmed by the company.

As part of National Consumer Protection Week March 5-9, Koster warns all consumers to be leery of tax scams, including schemes involving return preparer fraud, phishing and hiding income offshore. As with any scam, he said consumers need to be aware of anyone promoting ideas that seem too good to be true.

Koster said taxpayers should watch out for these common scams relating to taxes:

  • Return Preparer Fraud
    • Dishonest preparers can derive financial gain by skimming a portion of their clients’ refunds, charging inflated fees for return preparation services and attracting new clients by promising refunds that are too good to be true. Taxpayers should choose carefully when hiring a tax preparer. In 2012, all paid tax return preparers must have a preparer tax identification number (PTIN) and enter it on the returns he or she prepares. Taxpayers should contact the IRS to see if a PTIN has been issued to their preparer.
  • Phishing
    • Phishing is used by scam artists to trick victims into revealing personal or financial information online. IRS impersonation schemes rise significantly during the filing season and can take the form of emails, tweets, phony websites, phone calls and faxes.
    • Consumers can be misled by scam artists telling them they are entitled to a tax refund from the IRS and that they need to provide their personal information to claim it. Scam artists will then use the information they get to steal the victim’s identity, access bank accounts, apply for loans and charge credit or debit charges in the victim’s name.
    • The IRS does not initiate contact with taxpayers by email to request personal or financial information. Consumers who receive suspicious emails claiming to come from the IRS should not open any attachments or click on any links. Emails that claim to be from the IRS but do not begin with should be forwarded to the IRS mailbox:
  • Misleading Forms
    • Phony tax preparers may have confusing or misleading forms to lure consumers to do business with them. Consumers need to read all documents thoroughly and have a clear understanding of what fees they may owe or refunds they shall receive and where the refund is going.

Koster emphasized that during tax season, consumers should check the qualifications of the person doing the tax preparation. Consumers also should be on the lookout for inflated tax preparation fees and be cautious about the promises of guaranteed or inflated refunds. Taxpayers should get a copy of their tax return from the preparer. He said taxpayers should never sign a blank return and should review the entire return before signing it.

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