Tuesday, April 19, 2016
These 3 Tax Preparation Companies Are Being Accused of Preying on Low Income Families
Low- and moderate-income people often qualify for and receive the Earned Income Tax Credit when filing their income tax. It's a big benefit for low-income families because it reduces the amount they have to pay in taxes. A new report, however, revealed that some tax preparers are taking some of this money away from low-income families and putting it in their own pockets!
How tax preparers are cheating low-income people
Researchers at Johns Hopkins University examined Baltimore and Washington, D.C. markets and found a big difference in what chain tax preparers such as H&R Block, Liberty Tax Service and Jackson Hewitt are charging low-income families for tax preparation. The chains are charging, on average, $400 to low-income families who qualify for the Earned Income Tax Credit (EITC).
Fees reducing refund amounts
The average refund that EITC filers receive is about $2,200. But when tax preparers charge $400 to prepare their taxes, it puts a huge dent in a much-needed tax refund. Interestingly, the study found that there are about 75 percent more big brand tax preparation companies located in areas with a high concentration of EITC filers than in other areas.
So, what are the big brand tax prep companies saying about the study results? Not much. In fact, Jackson Hewitt did not respond at all, while H&R Block and Liberty Tax Service are denying any allegations that they are preying on low-income families.
What do you think?
Read more at www.whqr.org/post/tax-preparers-prey-low-income-filers-study-finds