BACP recently completed a citywide investigation on tax preparation services to protect residents who are seeking help preparing their taxes. The investigation found 65 percent of tax preparation businesses visited by City inspectors were not in compliance with the City ordinance regulating tax preparation services.
During the investigation BACP investigated 409 known tax preparers and found that 65 percent of the businesses visited by City inspectors were not in compliance with City ordinance. As a result, four businesses received cease and desist orders; 13 received notices to correct their (limited business license) licensing; 334 Administrative Notices of Violations (ANOVs) were issued to 147 businesses that will have to appear at administrative hearings. Fines for each violation can range from $50 to $10,000 per offense. There is the potential for $94,600 to $340,750 in fines based on the ANOVs issued.
The businesses were cited for violations that include operating without a license, failure to provide a consumer bill of rights, operating illegally or without state of Illinois approval; and failure to provide written disclosure.
“I want to educate the public seeking these services to know their rights when working with a licensed tax preparer so ensure they aren’t being deceived while trying to pay their taxes,” said BACP Commissioner Maria Guerra Lapacek. “These investigations will continue in order to protect consumers from predatory practices. We will shut down unlicensed businesses and take action against businesses that don’t follow the City ordinance.”
In order for tax preparation service providers to operate in the City, the City mandates that tax preparers inform taxpayers of their rights and disclose any hidden fees, eliminate surprise costs and hard to find fine print during tax preparation. BACP requires require businesses to use easy-to-understand disclosure forms that clearly lay out all costs before the return is prepared.
The Consumer Bill of Rights Regarding Tax Preparation Services and an informational flier called Know Before You Hire a Tax Preparer – both available in English and Spanish – can be found HERE.
A tax preparer cannot force customers to use a Refund Anticipation Loan or a Refund Anticipation Check (RALs/RACs) if they seek general tax returns services. Some predatory commercial tax preparers have been found to use misleading practices and fine print to drive families into costly and unnecessary refund products like Refund Anticipation Loans and Refund Anticipation Checks without full disclosure.
If a consumer feels there rights were violated, they should file a formal complaint with the City of Chicago, Department of Business Affairs and Consumer protection by calling 3-1-1.
A story by Jason Knowles of ABC 7 can be viewed HERE.
Free Tax Help Available to Chicago Residents
Qualified Chicago families and individuals can receive free tax return preparation and e-filing at tax sites located across the city. The City of Chicago works with two nonprofit partners (the Center for Economic Progress and Ladder Up) to offer free tax help throughout the tax season (late January through April 15) and at various points in the off-season
- Families earning up to $50,000 annually
- Individuals earning up to $25,000 annually
- Taxpayers that need to file an amended return (i.e. make corrections to a submitted return) or that need
to file tax returns for previous years (2011-2013) are
encouraged to visit a tax site in March
Learn more or find a tax site at http://www.taxprepchicago.org.
Consumer Alert from Center for Economic Progress
‘If You Have A Temporary Work Permit and are Filing Your Taxes, Do Not Give Money to a Tax Preparer for ObamaCare ‘Shared Responsibility Payment’
The Center for Economic Progress (CEP), Illinois’ trusted provider of tax and financial advice to low and moderate income families, has learned that undocumented immigrants and specifically ‘Dreamers’, DACA (Deferred Action for Childhood Arrivals) participants, are often being told that they are required to make a “shared responsibility payment” if they do not have health insurance. This information is not correct!
Undocumented immigrants are not permitted to purchase health insurance under the Obamacare (Affordable Care Act or ACA) and are therefore exempt from the shared responsibility provisions of the act. The same is true of DACA participants even though such participants have Social Security numbers.
CEP has also become aware that some tax preparers have told immigrant taxpayers to make the shared responsibility payment directly to the tax preparer.This is not only incorrect, it may be fraud. Under no circumstances should any taxpayer make an ObamaCare payment to the person who does your tax return!
If a shared-responsibility payment is owed by any taxpayer, it will be added onto the balance due on the taxpayer’s tax return. Any necessary payments will be made to the United States Treasury or they will be taken from the taxpayer’s refund.
If you are on a temporary work permit and a ‘Dreamer’ and have been given incorrect information or have paid for health insurance you should immediately contact the Center for Economic Progress
at 312-252-0280. We will answer your questions and direct you to the proper authority to get your money back.
IRS Names Top Scams of 2015
The Internal Revenue Service wrapped up the 2015 “Dirty Dozen” list of tax scams with a warning to taxpayers about aggressive telephone scams continuing coast-to-coast during the early weeks of this year’s filing season.
The aggressive, threatening phone calls from scam artists continue to be seen on a daily basis in states across the nation. The IRS urged taxpayers not give out money or personal financial information as a result of these phone calls or from emails claiming to be from the IRS.
The “Dirty Dozen” scams are:
Remember, the IRS does not use email, text messages or any social media to discuss your personal tax issue. For more information on the “Dirty Dozen” and other tax scams, visit www.irs.gov.