In February 2012, there was a group of taxpayers in Chicago (and other states) that were pretty irate with one tax preparation company.  Essentially, consumers were complaining of being told that the preparation of their tax return would cost $ and were told they had to pay $$$ when they went to get their return.  There were a host of other charges made regarding this firm (e.g. inability to cash refund checks, checks for lesser amounts, etc) which ultimately led to the company being barred by the Illinois Attorney General from conducting business in Illinois.

Taxpayers in urban areas are sometimes targeted by unscrupulous tax preparation companies.  These companies often use deceptive advertising practices, fail to fully disclose the cost of their services and often prey on the ignorance of those taxpayers who are less knowledgeable of their options.  Well, the IRS and other governmental agencies got tired of getting complaints from Senators and Congress on behalf  dissatisfied taxpayers.  The result?  The elimination of certain “predatory” products (e.g. Refund Anticipation Loans) as well as greater regulation/enforcement of preparers.

In an effort to protect Chicagoans, the Chicago City Council passed an ordinance in 2012 to help educate and protect them against unfair tax preparers.  If you are a taxpayer using a paid preparer in 2013, know that most* tax preparers must do the the following:

• Offer a detailed explanation of their available services.
• Prior to rendering any service must provide the price of each offered service, any and all fees, and an estimate of the total charge based upon the services chosen for purchase.
• Inform customers of the reasonable period of time they can expect to wait for a refund.
• Tell customers they have the right NOT to utilize an alternative settlement product.
• Certify that they provided a clear explanation and the required disclosures.
• Inform customers of their right to file a complaint.

We recommend that you visit the City’s website and print the appropriate copy (English or Spanish) applicable to you.  That way you can discuss it with your preparer if they give you any indications that they may not be on the “level” so to speak.  Personally, we’d look for another preparer if one gives you any reason to believe that they may be unscrupulous.  Matter of fact, we know just who to recommend!

Until next time.

* This ordinance applies to preparers physically located in the City of Chicago, with the exception of CPAs and Attorneys.