City fines tax preparer frauds

Tax season can be stressful enough, and to help, the city is fining fraudulent tax-preparers and offering residents of low- and moderate-incomes a myriad of different options for saving money while filing their taxes.

The Department of Consumer Affairs released findings that show that one in three tax-preparation services violated consumer protection laws after it conducted 1,200 inspections all over the city, and was announced at a press conference on Wednesday, March 30 at a tax preparation and financial center in Highbridge.

The investigation concentrated on tax preparers who were charged with violations in 2009 and 2010, as well those located in communities with large immigrant populations and high-usage of “refund-anticipation” loans, Mayor Michael Bloomberg and DCA commissioner Jonathan Mintz said, as both also chose to highlight the many low and no-cost options New Yorkers earning less than $57,000 have when they are filing their taxes.

“New Yorkers deserve every penny they get back of their refund, which is why the Department of Consumer Affairs not only offers ways for people to file free or at low-cost, but conducts an annual inspection of hundreds of tax preparers,” Bloomberg said. “If you aren’t using one of the City’s filing options, we want to make sure all New Yorkers are protected in whichever tax preparer they choose.”

The rate of compliance of tax preparers surveyed by the DCA was 65 percent in 2011, down from about 70% in 2010. Of the 1,600 or so violations issued, some of the most common infractions of the law were advertising in one language while providing services in another, not disclosing the annual interest rates of refund anticipation loans that can sometimes run between 50 and 500 percent, and misrepresenting tax preparer qualifications.

“This tax season Consumer Affairs conducted over 1,200 inspections of store-front tax preparers citywide and found that one in three violated consumer protection laws,” Jonathan Mintz said. “New Yorkers deserve to work with qualified and honest tax preparers, which is why the department continues to make this a top priority and has also created a network of free and low-cost tax preparation options for New Yorkers making $57,000 or less.”

Among those options are Volunteer Income Tax Assistance Sites run by the City for individuals who earn less than $50,000 with children or $18,000 if they are single, a free tax online tax preparation site at for those earning less than $57,000, a city-sponsered coupon to H&R Block that provides for residents with families earning less than $41,000 and residents without children earning below $31,000 to have their taxes done by a tax preparer for $29.

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