I-TEAM INVESTIGATES: Local Tax Preparer is under investigation (again)

Published: Feb. 15, 2019 at 4:49 PM EST
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Friday, Feb. 15, 2019

(News 12 at 6 O'Clock / NBC 26 at 7)

AUGUSTA, Ga. (WRDW/WAGT) - Nothing is certain but death and taxes and, according to the IRS, unscrupulous tax preparers are looking to make a fast buck from honest people seeking tax assistance. The Better Business Bureau is investigating a local tax preparer with a history of complaints for the second time, and so is our I-Team.

It feels like Déjà vu. People are once again filing complaints against a local tax preparer. Senior Investigative Reporter Liz Owens first went looking for the franchise owner of the Instant Tax on Peach Orchard Road in 2012.

Dozens of viewers called her because they felt they were scammed. They claimed they would take out a loan with Instant Tax only to find out later the company filed their taxes without their knowledge and then charged them hundreds of dollars for doing it.

People across the country had similar complaints at other Instant Tax locations. The Department of Justice investigated and in 2013 a judge ordered the company to shut down and barred the corporate owner from ever operating another tax business because of "overwhelming" evidence of "fraud and deception."

We thought it was the end of the story until a familiar name came across Gigi Turner's desk a few weeks ago.

"We assumed he wasn't allowed to do that type of work in our area and then we find out from a complaint submitted to the BBB," she said.

Precious Daniel's wanted a little extra cash to help move. She heard a tax place in town was giving cash rebates.

"You sign off on a paper that they typed up stating you're getting a hundred dollar rebate," Daniels said.

She said they told her she would get the rebate for allowing them to do a refund estimate. The owner of Citi Tax Financial says the rebate is for agreeing to file with them. Daniel's signed a document agreeing to file her taxes with Citi Tax and acknowledges the rebate will be deducted from her refund but it doesn't say what the rebate is for. They told her to bring her W-2 back to them when she got it. She would also need to sign an 8879. It's the IRS form which allows a tax preparer to file on behalf of a client.

"The form they needed to have signed so they could send it to the IRS...I never signed that form," she said.

Daniels didn't go back. She filed her own taxes. Well, she tried to file her taxes.

"On the thing, it gives you a code to reference why your taxes have been rejected," she said.

The IRS rejected her taxes because "the tax return has already been filed with the IRS."

Liz Owens: "Is that your signature?"

Precious Daniels: "No it's not. It's definitely not my signature."

Yonathan Michaels no longer owns the Instant Tax franchise but he does own Citi Tax Financial which is in the same building.

"Yes, she signed the on the signature pad," Michaels told Liz Owens.

He says he did not forge Daniel's signature on the 8879 to be able to legally file without her permission.

"Anybody that knows me knows I write my name my "P's" and "D's," Daniels said. We compared the signature on the 8879 to the signature on her license. We also compared it to other documents Daniels says she did sign at Citi Tax. None look like the one on the 8829.

Daniels says it isn't the only fake document. Remember she said she never did go back to Citi Tax with her W-2? The W-2 Citi Tax submitted to the IRS is not the same one Daniels employer sent her.

The owner of Citi Tax told Liz Owens his employee made a mistake. Michaels said the computer program he uses generates a form that looks like a W-2. He said the program automatically fills in the employer's identification number after entering just enter a client's name and employer's name. He said the form is just for his own records but somehow Daniel's got sent to the IRS.

Michaels was not named in the 2013 federal Instant Tax case but the I-Team did find his name mentioned in the evidence. Michaels told us the corporate owner "numbers are good. people are still coming in, we have 453 accepted. I have close to 90 reject(ed). I just couldn't find their EIN."

Prosecutors believed he along with other franchise owners were using pay stub and EIN numbers to file returns without clients permission.

"If they have access to computer records where they can pull up computer records where you previously filed then they may have enough information to file for you," Turner warned. "At this point we are very concerned for consumers in the area."

Michaels told the I-Team he believes Daniels was scamming him to get the hundred dollar rebate. He added he is not going to make her pay it back the $100 rebate or the $389 filing fee he charged her.

The IRS warns consumers to stay away from fly by night tax preparers and anyone advising you into taking credits or deductions you aren't entitled to claim.

The IRS says scam preparers may do this to increase their fees. Speaking of fees, get all fees in writing before handing over your personal documents. You should also check out the tax preparer's credentials and reputation.