Texas Attorney General Greg Abbott has filed a lawsuit and obtained an asset freeze against Twin Tax Services, whose work resulted in serious problems with the U.S. Internal Revenue Service for many consumers.
The lawsuit also targets Tax Works International Inc. and other various business names, as well as Anthony and Kenneth Barber, Ramon Perez, Larry Rodriguez, Jens Schoemer and Andrew Manning. The suit's filing will effectively thwart this week's scheduled reopening of the businesses.
"Tax season can be ripe picking for unscrupulous operators preying on unsuspecting taxpayers," said Abbott. "I intend to pursue these companies and individuals to the fullest extent allowed under the law because many taxpayers have been hurt, audited by federal authorities, through no fault of their own, and they need relief."
The businesses operated under various assumed names but consistently exaggerated or otherwise misled consumers about their level of expertise in tax preparation.
While Twin Tax widely promised consumers the lowest tax liability and best income tax refund possible, the Attorney General's investigation shows the defendants routinely "padded" deductions in a such as way as to trigger IRS audits and cause filers major tax liabilities the following year.
Moreover, Twin Tax and its operators allegedly issued checks to consumers for what the operators alleged were "accurate" federal income tax refunds the company received from the IRS. However, unknown to consumers, the company deducted excessive amounts from the IRS refunds.
Most customers did not receive a refund check directly from the IRS but received checks from the company that were in amounts significantly less than the amounts Twin Tax received through direct deposits from the IRS.
The defendants are accused of targeting consumers with little knowledge of federal tax laws, even advertising deceptive services in Spanish-speaking communities and failing to assist consumers or represent them in any way, as promised, if they became targets of the IRS.
The Attorney General's lawsuit demands the refund of all money wrongfully taken from taxpaying citizens, civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act and attorneys' fees.
The Attorney General offers these guidelines when selecting a tax return preparer:
• Check credentials and avoid preparers who claim they can obtain larger refunds than others;
• Avoid those who base their fee on a percentage of the refund;
• Use a reputable professional who signs your tax return and provides you with a copy;
• Consider whether the business will still be around in the future in case you have questions about tax preparation;
• Review your tax return closely before signing and ask questions on entries that are unclear.
