September 25, 2012
Liberty Tax former superstar trainer Annie Fuller reveals sales tactics using fear, greed, shame and guilt on customers to boost revenue in an internal email leaked to UnhappyFranchisee.com.
Annie Fuller was a Liberty Tax Services franchisee superstar.
UnhappyFranchisee.com has received an internal memo that is also an exhibit in an active Liberty Tax lawsuit. In the email, Fuller outlines the sales process she has used to train franchisees and their tax preparers nationwide.
The questionable sales process promoted by Fuller is based on manipulating the customer’s emotions (Fear, Greed, Shame, Guilt) to get them to accept a seemingly inflated tax preparation fee.
The first, and most useful emotion, according to Fuller is FEAR.
Step One (Fear): Give the customer a “heartattack”
“Fear sells,” writes Fuller. She instructs the preparers to scare Liberty Tax customers by showing their tax liabilities before any deductions, and emphasize the size of the amount due to instill panic.
Start by putting in ONLY and ALL their income…
State clearly “based on your income you owe the IRS $_____”
Use the word THOUSAND if it applies not 15 hundred. 2 THOUSAND 5 hundred dollars. 3 THOUSAND dollars!
If they owe very little or have a refund… you owe the IRS some money right now or you are ONLY getting back $___ dollars.
If Step One is done correctly, according to the Liberty Tax trainer, “they are having the heart attack you want them to have because maybe they cant get themselves out of all that amount.
“they are worried…” writes Fuller. “USE THAT TO YOUR ADVANTAGE… Fear sells!
Step Two (Relief): Be the hero with magic Liberty Tax forms
Once the customer is sufficiently scared (or depressed), the preparer should announce that he/she will now save the day.
Fuller instructs preparers to say “Ok now its time for me to go to WORK (emphasise this word, You’re in good hands, we are going to work together to get this amount lower/refund higher. We [Liberty Tax) will be like the safety net between you and the IRS...”
Fuller tells Liberty Tax franchisees and preparers to begin to simultaneously lower the customer’s tax burden and raise/justify the growing preparation fee in a series of stages.
Liberty Tax preparers are never to name the additional forms they add to the return, just to call them by the amount of Liberty’s upcharge for including the form.
“ok we are only going to ADD (emphasis this word) a $70 form and lets see how this helps you, as you know we ONLY charge for forms we use on YOUR (emphasise this word) return, so we’ll see how well this helps you…
Put in basic sch A stuff but do not educate client on name of form just call it a $70 form…
“Ok based on your income you OWED the IRS $_____ so now you only owe the IRS $_____” or are getting back $_____
at any point if they aren’t actually getting a refund state this even more emphatically “I was able to get you $_____ MORE! ISNT THAT GREAT?” (nod head while doing this to get them to nod back)
“Now lets see if we can do more, I’m going to ADD another $45 form, again we only charge for the forms we use for YOUR return so lets get going.”
Add in a 2106 but again do NOT educate client on what form…
If they have other deductions like vehicle use the same method… we’re going to add a $25 form, let’s see where we’re at now… etc. etc.
Fuller emphasizes the importance of not educating the client as to the names of the forms, and to refer to them by their upcharge value to desensitize the customer before presenting the whopping prep fee at the end.
Former Liberty Tax superstar trainer instructed preparers to use her techniques to boost their tax preparation fees so high ($400 – $650) that she has developed more steps to help preparers actually tell the customers the final fee with a straight face.
Check back for more steps to come…
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September 20, 2012
Liberty Tax fraud: UnhappyFranchisee.com has received information alleging that JTH, Inc., parent of Liberty Tax franchise system, not only condones but has provided training to its franchisees and employees in using deceptive techniques for maximizing customer refunds from the IRS.
One of those alleged techniques is to encourage tax filers to add non-existent business income in order to maximize Earned Income Tax Credit.
This past Tuesday, a tax-preparer working for a Michigan Liberty Tax franchise pleaded guilty U.S. District Court to preparing and filing more than 40 fraudulent income tax returns.
According to the Detroit News, “Marquitta Nicole Jackson, 28, worked as a tax preparer at a Liberty Tax franchise from 2007-10 when she worked on the fraudulent returns for various taxpayers, according to court records.
“Jackson admitted she had prepared the returns to falsely claim the taxpayers had received self-employment income from a business they operated to maximize the Earned Income Tax Credit, according to court records. The taxpayers were not entitled to the credit.”
The Liberty Tax franchise preparer’s fraudulent returns caused the government to lose $155,000.
A sentencing hearing was set by Judge Judge John Corbett O’Meara for January 15, 2013.
Marquitta Nicole Jackson faces a maximum penalty of three years in prison and a $250,000 fine.
DO LIBERTY TAX PREPARERS ENCOURAGE CUSTOMERS TO LIE ON THEIR TAX RETURNS?
HOW PREVALENT IS THIS PRACTICE?
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August 30, 2012
UnhappyFranchisee.com – LIBERTY TAX Service Reports Fiscal 2013 First Quarter Results
JTH Holding, Inc. (NASDAQ:TAX), franchisor of Liberty Tax Service, reported a $6.2 million loss for loss for the fiscal first quarter ended July 31, 2012.
The press release from JTH Holding Inc. included interesting information regarding the performance of existing Liberty Tax franchise owners, as well as the recruitment of new Liberty Tax franchisees.
According to the Liberty Tax press release (below):
Liberty Tax has held a record number of franchisee meetings this quarter.
“During the first quarter the Company held a record number of meetings with franchisees planning for the 2013 tax season. “The involvement of our franchisees in our tax season planning is one of the key attributes that separates Liberty from the other national players,” noted John Hewitt, Chairman and CEO.
John Hewitt considers franchisee input the key to Liberty Tax’s success
“The marketplace insights provided by our franchisees allow us to continually enhance our system of doing business, which is a key to our success,” noted Hewitt.
Liberty Tax franchise sales activity is up 27%
The Company reported that its franchise sales season is off to a good start with leads, conference call attendance and seminar visits all up by more than 27% from fiscal 2012. During the previous two years, approximately 10% of the Company’s yearly territory sales and new franchisees closed during the first quarter. “Although the economic climate has reduced the amount of available investment capital for new and existing franchisees, I am very pleased with the interest levels shown during the first quarter by potential new franchisees and the eagerness of our existing franchisees to consider expanding,” said Mr. Hewitt.
JTH Holding lent franchisees $68M at 12% interest, John Hewitt $750,000 at 4.5%
According to UnhappyFranchisee.com commenter Bill:
Looking over the 10K and you see that Liberty tax lent John 750,000 at 4.5% meanwhile they sock it to the franchisees at 12%.
341 Liberty Tax locations (8.8%) closed in 2011
The 10K will also show you the 341 stores closed in 2011 a failure rate of 8.8% based on number of stores open in 2011. 2012 results show the average store did 523 returns. The net average fee was $173.00. The average store revenue was $85,847. These figures are an average. A new store is more likely to have a return count of around 150 to 200 and grow around 15% per year over the next couple of years. For people that already have the tax knowledge, the purchase of any franchise doesn’t make sense if that is the kind of return volume you are going to do.
Are you familiar with the Liberty Tax franchise or JTH Holding, Inc. (NASDAQ:TAX)? Share a comment below.
Here is the company press release, distributed Aug. 29, 2012
JTH Holding Inc : Liberty Tax Service Reports Fiscal 2013 First Quarter Results
VIRGINIA BEACH, Va.–Aug. 29, 2012– JTH Holding, Inc. (NASDAQ:TAX)( the “Company”), the parent company of Liberty Tax Service, today reported a net loss for the fiscal first quarter ended July 31, 2012, of $6.2 million, or $0.51 per share, compared to a loss of $5.0 million, or $0.44 per share, in the prior year period. Revenues grew 39% to $6.8 million for the fiscal first quarter ended July 31, 2012 compared to the prior year period. The Company’s operating expenses in the quarter included approximately $525,000 of costs associated with being a public company that were not incurred in the prior year quarter.
“We are pleased to announce first quarter financial performance, in-line with our expectations,” noted Mark Baumgartner, CFO. “Increased losses in our first and second quarter, when compared to prior periods, are expected as our company prepares for another high growth tax season,” explained Baumgartner.
Traditionally the Company spends a significant portion of the first quarter of its fiscal year planning for the upcoming tax season and kicking off the franchise sales season. During the first quarter the Company held a record number of meetings with franchisees planning for the 2013 tax season. “The involvement of our franchisees in our tax season planning is one of the key attributes that separates Liberty from the other national players,” noted John Hewitt, Chairman and CEO. “The marketplace insights provided by our franchisees allow us to continually enhance our system of doing business, which is a key to our success,” noted Hewitt. The Company plans to host an Investor Day in New York on December 12, 2012, at which time the Company anticipates sharing some of its 2013 plans.
The Company reported that its franchise sales season is off to a good start with leads, conference call attendance and seminar visits all up by more than 27% from fiscal 2012. During the previous two years, approximately 10% of the Company’s yearly territory sales and new franchisees closed during the first quarter. “Although the economic climate has reduced the amount of available investment capital for new and existing franchisees, I am very pleased with the interest levels shown during the first quarter by potential new franchisees and the eagerness of our existing franchisees to consider expanding,” said Mr. Hewitt. The Company plans to provide detailed sales activity in the second and third quarters, when historically, the cumulative closing activity becomes significant.
The Company also announced that its first meeting of stockholders since becoming a public company will be held at 11:00 a.m. on Friday, November 16, 2012 at the Virginia Beach Convention Center. The Board of Directors of the Company has established the close of business on September 19, 2012 as the record date for stockholders to vote at the meeting.
At 8:30 a.m. Eastern time on August 29, 2012, the Company will host a conference call for analysts, investors and shareholders. To access the call, please dial the number below approximately 5 to 10 minutes prior to the scheduled starting time:
The call will also be webcast in a listen-only format. The link to the webcast may be accessed on the Company’s investor relations website at www.libertytax.com
A replay of the call will be available beginning at approximately 10:30 a.m. eastern on August 29, 2012 and continuing until September 5, 2012, by dialing (888) 286-8010 (U.S./Canada) or (617) 801-6888 (International). The participant passcode is 92585839.
About JTH Holding, Inc.
JTH Holding, Inc. is the parent company of Liberty Tax Service. Liberty Tax Service is the fastest-growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 10 million individual income tax returns. With 43 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service. Liberty Tax Service is the only tax franchise on the recently released Forbes “Top 20 Franchises for the Buck.”
|JTH Holding, Inc.|
|Condensed Consolidated Balance Sheets|
|Unaudited, amounts in thousands|
|July 31||April 30|
|Cash and cash equivalents||$||2,228||$||19,848|
|Prepaid expenses and other current assets||8,393||5,655|
Total current assets
|Property, equipment, and software, net||25,462||23,948|
|Notes receivable, excluding current portion, net||37,544||35,863|
|Other intangible assets, net||25,483||22,158|
|Other assets, net||2,589||2,580|
Liabilities and Stockholders’ Equity
|Current installments of long-term debt||$||3,174||$||2,736|
|Accounts payable and accrued expenses||7,301||14,170|
|Due to area developers||15,859||21,893|
|Income taxes payable||-||6,689|
|Other current liabilities||4,452||4,492|
Total current liabilities
|Long-term debt, excluding current installments||25,756||26,249|
|Revolving credit facility||11,078||-|
|Other non-current liabilities||13,839||12,310|
|Class A preferred stock, $0.01 par value per share||-||2,129|
|Special voting preferred stock, $0.01 par value per share||-||-|
|Class A common stock, $0.01 par value per share||121||103|
|Class B common stock, $0.01 par value per share||9||9|
|Exchangeable shares, $0.01 par value||1||1|
|Additional paid-in capital||6,708||3,182|
|Accumulated other comprehensive income, net of taxes||493||676|
Total stockholders’ equity
|Total liabilities and stockholders’ equity||$||176,741||$||188,741|
|JTH Holding, Inc.|
|Condensed Consolidated Income Statement|
|Unaudited, amounts in thousands, except per share and share data|
|Three months ended July 31,|
|Franchise fees, net||$||2,411||$||1,203|
|Royalties and advertising fees||1,007||1,018|
|Tax preparation fees, net of discounts||216||156|
|Employee compensation and benefits||6,666||5,650|
|General and administrative expenses||5,616||3,844|
|Depreciation, amortization, and impairment charges||1,891||1,622|
Total operating expenses
Loss from operations
|Other income (expense):|
|Foreign currency transaction gains||2||2|
Loss before income taxes
|Income tax benefit||(4,085||)||(3,369||)|
|Net loss attributable to common stockholders|
|Basic and Diluted||$||(0.51||)||$||(0.44||)|
|Weighted-average shares outstanding|
|Basic and Diluted||12,170,977||11,361,258|
|JTH Holding, Inc.|
|Condensed Consolidated Statements of Cash Flows|
|Unaudited, amounts in thousands|
|Three months ended July 31,|
|Net cash used in operating activities||$||(16,217||)||$||(11,384||)|
|Cash flows from investing activities:|
|Issuance of operating loans to franchisees||(9,956||)||(7,985||)|
|Payments received on operating loans from franchisees||999||1,134|
|Purchases of assets from franchisees||(1,329||)||(285||)|
|Proceeds from sale of customer lists and other assets||350||87|
|Purchases of property and equipment||(1,976||)||(3,267||)|
|Net cash used in investing activities||(11,912||)||(10,316||)|
|Cash flows from financing activities:|
|Proceeds from the exercise of stock options||1,592||21|
|Repurchase of common stock||(843||)||(1,654||)|
|Repayment of long-term debt||(1,561||)||(704||)|
|Borrowings under revolving credit facility||11,078||28,597|
|Repayments under revolving credit facility||-||(4,145||)|
|Payment for debt issue costs||(8||)||-|
|Tax benefit of stock option exercises||269||458|
|Net cash provided by financing activities||10,527||22,573|
|Effect of exchange rate changes on cash, net||(18||)||(1||)|
|Net increase (decrease) in cash and cash equivalents||(17,620||)||872|
|Cash and cash equivalents at beginning of period||19,848||1,662|
|Cash and cash equivalents at end of period||$||2,228||$||2,534|
|Supplementary cash flow data:|
|Cash paid for interest, net||$||282||$||221|
|Cash paid for taxes, net||6,364||6,968|
JTH Holding, Inc.
Mark F. Baumgartner, 757-493-8855
ARE YOU A LIBERTY TAX FRANCHISE OWNER OR FRANCHISEE?
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June 15, 2012
JTH Holding, Inc. (the "Company"), the parent company of Liberty Tax Service, has released this press release containing its Fiscal 2012 Full Year Results and announcing that shares of Class A Common Stock to become available for trading on the OTC Bulletin Board on June 14, 2012.
To learn how Liberty Tax franchise owners are feeling, read: LIBERTY TAX SERVICE Franchise Complaints.
To share your thoughts on Liberty Tax 2012 results and the IPO, please share a comment below.
Here’s the company press release:
JTH Holding, Inc. Reports Fiscal 2012 Full Year Results and the Initiation of Trading on the OTC Bulletin Board
June 14, 2012, 8:00 a.m. EDT – press release
VIRGINIA BEACH, Va., Jun 14, 2012 (BUSINESS WIRE) — JTH Holding, Inc. (the "Company"), the parent company of Liberty Tax Service, today reported net income for the fiscal year ended April 30, 2012 of $17.4 million, or $1.23 per diluted share. During its fourth quarter, the Company determined that it would postpone its planned initial public offering (IPO), and for this reason incurred an after tax charge of approximately $0.8 million associated with the costs of that offering. Adjusting for that one-time charge, adjusted (non-GAAP) income for fiscal 2012 was $18.3 million, an increase of 16% compared to net income in the prior year. Adjusted earnings per share increased 21% to $1.29 per diluted share due to both the increased earnings and a decline in weighted average shares outstanding. Revenues grew 14% to $109.1 million in fiscal 2012 compared to the prior year.
During the recent tax season the Company operated in 4,183 office locations in the United States and Canada, compared to 3,845 in the prior year. In both years, more than 98% of our office locations were operated by franchisees of the Company. Total returns filed by the company increased to approximately 2.2 million from approximately 2.0 million in the prior fiscal year, an increase of 7%. The IRS recently reported that total tax returns filed grew 2.1% during this tax season compared to 2011 tax season; however tax returns claiming a refund grew by only 0.9% during the 2012 tax season.
"Fiscal 2012 was another important year in Liberty’s growth strategy to become the leader in the tax preparation industry," noted Founder and CEO John Hewitt. "In a tough economic climate that has impacted small businesses around the country, and resulted in fewer businesses being operated through franchisees, Liberty Tax Service continues to grow and expand. Issues at the IRS during the early portion of the season and the expiration of the Make Work Pay Tax Credit made customer service a challenge," noted Mr. Hewitt, "however our franchisees continue to provide the best service in the industry."
New Credit Facility
During the fourth quarter of Fiscal 2012, the company replaced its credit facility that was due to mature in March 2013 with a new five year credit facility through a syndicate of seven banks. The new credit facility totals $130 million and is comprised of a $25 million term loan and a $105 million revolving line of credit. " The increase in the size of the facility and the fact that a majority of the existing banks chose to continue in our facility is another demonstration of the confidence our partners have in our business model, and our ability to grow and expand our brand," noted Mark Baumgartner, CFO.
Initiation of Trading on the Over the Counter Bulletin Board (OTCBB)
Although the Company recently determined that it would postpone its IPO, it also concluded that given the size of the Company’s stockholder base, it would be appropriate for the Company to make itself subject to the reporting and other requirements applicable to public companies, and to seek to facilitate stockholders liquidity in their investment. Accordingly, the Company’s registration statement under the Securities Exchange Act of 1934 has been declared effective as of June 13, 2012, and the Company expects its shares of Class A Common Stock to become available for trading on the OTC Bulletin Board on June 14, 2012. While traded on that system, the Company’s Class A Common Stock will be represented by the symbol "LTAXA." The Company has filed an application for listing its Class A Common Stock on NASDAQ, and that application is pending.
"We believe that the tax preparation marketplace will change in response to increased regulation and oversight and have been positioning Liberty to benefit from these changes," noted Mr. Hewitt. "Becoming a public company is another step in our process and provides us additional flexibility to finance potential growth opportunities that may present themselves," Mr. Hewitt noted.
At 8:30 a.m. Eastern time on June 14, 2012, the Company will host a conference call for analysts, institutional investors and shareholders. To access the call, please dial the number below approximately 5 to 10 minutes prior to the scheduled starting time:
U.S. 866-831-6267 International 617-213-8857 Passcode: 29370301
The call will also be webcast in a listen-only format. The link to the webcast can be accessed on the Company’s investor relations website at www.libertytax.com
Webcast replay will be available starting at approximately 12:00 p.m. Eastern time today.
About Liberty Tax Service
Liberty Tax Service is the fastest-growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 10 million individual income tax returns. With 43 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service. Liberty Tax Service is the only tax franchise on the recently released Forbes "Top 20 Franchises for the Buck."
SOURCE: Liberty Tax Service
Liberty Tax Service: Mark F. Baumgartner, 757-493-8855 email@example.com
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November 1, 2011
Liberty Tax Franchise is promoting a Zero Franchise Fee offer. Their Email newsletter solicitation is below.
What do you think? Is it a great deal? The text reads:
“Owning a Liberty Tax office is now more affordable than ever. With some franchise fees totaling more than $40,000, Liberty Tax Service is offering No Franchise Fee. Liberty’s No Franchise Fee Offer helps reduce the initial costs associated with purchasing a franchise and gets you on the path to owning your own business.
“Franchise Fee is $0. Territory must be an un-owned, undeveloped territory. Franchisee will pay a $2,500 refundable security deposit. Security deposit is refunded upon the completion of 5 year franchise agreement or the sale of territory. Territory must be opened by 1/8/2012. Offer expires 12/31/2011. Available in select areas…”
Here’s the email offer:
Last Chance – Zero Franchise Fee
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July 29, 2011
Liberty Tax is looking for dreamers.
Liberty Tax is looking for dreamers willing to invest their savings, retirement accounts and/or home equity and a good portion of their time and energy into a Liberty Tax franchise.
Liberty Tax is recruiting hard for dreamers – They are even willing to waive the $40,000+ franchise fee. (See email ad below, left)
But are Liberty Tax franchise owners really living the American Dream of business ownership… being their own bosses… controlling their own destinies?
Does the portrayal of the Liberty Tax franchise in the recruitment materials match the reality as reported by current and former Liberty Tax franchise owners?
We’ve included excerpts from a current Liberty Tax franchise ad, and asked Liberty Tax franchise owners to share their thoughts below.
“At Liberty, Dreamers are Welcome.”
In a franchisee recruitment page currently running on Franchise.Com, Liberty Tax describes their target franchisee:
“At Liberty, dreamers are welcome.”
“dreamers who want to work for no one … but themselves”
“have big dreams.”
“dream of success.”
“Possess a passion.”
“Won’t accept average.”
“an exclusive group”
“No Tax Experience? No Worries.”
“prepared to jump in with both feet”
“people who have that fire in their belly and a desire to succeed”
“Liberty franchisees are CEOs”
“embracing proven marketing plans, working seasonally and connecting through cutting-edge social communications.”
“you’ll have a proven system to follow that was 40+ years in the making”
“have access to more than 600 years of managerial experience, tax industry expertise and street-savvy marketing.”
“work really hard for 3 ½ months then spend the rest of the year pursuing other interests… Go on vacation. Raise alpacas. Learn to yodel…”
What they’ll get as Liberty Tax franchise owners:
“we will give you every bit of training you need—and then some. We’ll start with a week-long session at our corporate office in Virginia Beach, VA; follow it up with online and printed manuals, traditional and non-traditional training methods, webinars, onsite training, off-site training, conference calls and newsletters.
“Hewitt shares his insight with his franchisees, as a hands-on CEO, hosting conference calls, seminars and personally answering his e-mails.”
“A seasonal workforce keeps overhead lower than nearly any other industry.”
“No inventory. No worries about inventory loss.”
“Competitive advantage, population trends, traffic counts, visibility and more”
“Our team of experienced Site Selectors works one-on-one to locate, negotiate and sign the perfect location for your Liberty Tax office.”
“You will be in business for yourself with a very powerful partner ”
“We have nothing to hide.”
On the Franchise.com ad, Liberty Tax states “We have nothing to hide.” So we invite Liberty Tax franchise owners to share whether the Liberty Tax franchise has enabled them to live their dreams and control their own destinies.
How well does the Liberty Tax marketing materials reflect the reality of the opportunity?
Do you think that recruiting “dreamers” with an emotional appeal to their egos and self-image is a wise, long-term strategy?
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
April 25, 2011
(UnhappyFranchisee.com) Liberty Tax kicked sand in the faces of tax franchise competitors Jackson Hewitt and H&R Block by boasting strong systemwide sales growth for the just-completed tax season.
Here is the Liberty Tax company news release, posted on Businesswire. Feel free to share your views about the health of Liberty Tax, Jackson Hewitt and H&R Block in the comments section below.
Read previous posts here about LIBERTY TAX.
* * * * *
Liberty Tax’s Preliminary Tax Season Results Show Solid Sustainable Growth
Company Has Responded to Changing Industry Landscape
VIRGINIA BEACH, Va.–(BUSINESS WIRE)–Liberty Tax Service has demonstrated the ability to respond to a plethora of industry challenges and regulations during its most recent tax season and reports solid growth in both tax returns and revenue for the just-completed tax season. Throughout this decade, Liberty Tax Service has demonstrated significant gains in an industry formerly dominated by tax giant H&R Block (NYSE:HRB) and, during the 21st century, Liberty has grown by more tax returns than both Jackson Hewitt (NYSE:JTX) and H&R Block combined.
Liberty Tax Service prepared 11% more returns through April 19, 2011, compared to the same time period in 2010. System wide revenues increased 12%. The Company continued to offer competitive choices, allowing its growing customer base to choose between professional services in brick-and-mortar locations, and do-it-yourself online tax preparation with its eSmart Tax product at www.esmarttax.com.
In 2011, change proved to be another of life’s certainties, and the major tax players were faced with challenges of offering tax settlement products after the IRS cancelled the direct deposit indicator. The IRS also began phasing in increased regulations of tax preparers and their credentials. With a tax preparer certification process in place since 2007, Liberty Tax Service was poised for stricter IRS standards for tax preparers.
“We have rolled with the punches during this tax season. Tax preparer certification benefits not only the consumer, but the credibility of the tax industry and our collaborative effort to fight fraud. Liberty’s continued ability to offer customers the range of filing and tax settlement product options they expect has been another factor in our success this year,” Liberty Tax Service Founder and CEO, John Hewitt, reflected. “In addition, our execution and preparation paid off.”
Aggressive marketing coupled with a strong commitment to customer service have been key factors in building a successful brand in fourteen years. Since 1997, the Company has grown from 119 offices located in Canada, to over 3,800 throughout the U.S. and Canada today.
About Liberty Tax Service
Liberty Tax Service is the fastest -growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 8,000,000 individual income tax returns. With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.
The Liberty Tax Service franchise opportunity is #1 in the tax franchise category of the 2011 Entrepreneur “Franchise 500.” Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax. Other services include audit assistance, a money back guarantee, and free tax return checking.
* * * * *
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March 10, 2011
Liberty Tax franchise owner Tami Woestemeyer didn’t make it through her first season without being targeted for a tax refund scam.
Thanks to her quick thinking and the alleged scammer’s overly flamboyant ways, Woestemeyer helped expose the scam that specifically directed at Liberty Tax franchise locations.
How the Liberty Tax Scam Worked.
According to the Colorado Springs Gazette, the alleged scammer is 50-year-old Randall Heath. Heath was booked into the El Paso, Texas County jail on Feb. 2 on suspicion of 23 counts of money laundering, theft, identity theft, forgery and giving false information to a pawn broker.
According to police, Heath used stolen identities to obtain refund anticipation loans from several Liberty Tax Service offices
Since mid-January, police say, Heath has been using stolen identities to try to get loans from several Liberty Tax Service offices. .
The identities had been obtained by a break-in at a home that contained records from a defunct business that contained its clients’ personal information.
Heath allegedly used the stolen information to create fake driver’s licenses and phony W-2s for each of the identity theft victims.
He then used the phony W-2s to apply for seven $1,500 loans from different Liberty offices as well as a $50 bonus for filing taxes with Liberty, for a total of $10,850.
At some of the Liberty Tax offices, Heath asked for the loans to be deposited directly into a bank account and asked for a check for the others.
According to Woestemeyer, the social security number checked out and his picture ID appeared real, so she initially processed the scammer’s paperwork.
Ain’t no Cure for Stupid, Mr. Heath
If Heath hadn’t over-acted and made some stupid mistakes, he may have been home free.
But over-act he did. Heath arrived at the Liberty Tax office in cowboy boots, cowboy hat and vest, gold chains, and flashy jewelry on his fingers.
He claimed that he worked for the U.S. Department of Homeland Security, though his W-2 wasn’t from the agency.
(At another Liberty Tax office, Heath allegedly “handed over a W-2 claiming an Alaska state tax. The problem: Alaska has no state tax… Heath returned an hour later with a corrected W-2.)
Initially, Woestemeyer processed his paperwork anyway, but her suspicions grew after she thought back on an offhand-comment he made. She called several other Liberty Tax locations and all had reported seeing the odd, bejewelled cowboy.
That’s when she called police. When Mr. Heath returned to pick up his check, they were waiting to add steel bracelets to his fashionable ensemble.
Warning for Liberty Tax owners: The next guy might not be so dumb.
Police seized $17,000 in a bank account Heath allegedly set up under the name of one of the identity theft victims. In addition to tax fraud, police suspect Heath attempted to use victims’ personal information to to pawn gold jewelry and try to obtain financing from a local used car dealership.
But what’s scary is that if he had not overplayed his hand with the rhinestone cowboy from Homeland Security routine, he might have continued to get away the scam.
So Liberty Tax preparers be warned: Make sure your customers are who they say they are, especially if they have Alaskan W-2s.
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February 2, 2011
Liberty Tax mascot Lady Liberty was arrested and jailed in Lancaster, PA last Friday.
According to Larry Alexander’s story in the Lancaster Intelligencer Journal, Joseph A. Shevock, 43, has worked as the local Liberty Tax mascot since the last week in December.
Friday, Lancaster police received a tip that the man dressed up as the Statue of Liberty at the corner of Prince & King streets resembled a wanted forgery suspect named Joshua Dennison.
Police detained Shevock on suspicion of being Dennison. In the process of determining that Shevock was neither the suspected forger nor the one true Lady Liberty, Lancaster police discovered that the Liberty Tax mascot was wanted in Cambria County on burglary charges.
Joseph “Give me Liberty or Give me the Cambria County Slammer!” Shevock was remanded to the Lancaster County Jail and awaits extradition.
Joshua Dennison, a man with the dual misfortune of being wanted on forgery charges and resembling a man dressed as Lady Liberty, is still at large.
“WANTED: your poor, your wretched, your huddled masses… Immediate openings! No background check!”
A bronze plaque on the Statue of Liberty includes the words “Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore… Send these, the homeless…”
These words seems to have been quite inspiring to the Liberty Tax human resources department, especially when it comes to hiring Liberty Tax mascots.
Unhappy Franchisee has long questioned the marketing strategy of placing the integrity of a national brand, upon which franchisee livelihoods depend, into the hands of nearly anyone willing to wear a silly clothes and crazy foam headgear. Just because it works for Green Bay Packers fans doesn’t mean it’s a wise move for a financial services company.
Jacqueline Gonzalez, the supervisor of the office that hired wanted fugitive Shevock, acknowledged that Liberty Tax does not require background checks for the mascot job. According to the LIJ, “Applicants supply references, go through an interview and orientation, and then are given a trial run. If they do well the first day, they are given more hours.”
One wonder what would constitute not doing well the first day? Holding the Liberty Tax sign askew? Failing to keep the torch of liberty burning bright?
Is the age of mascot profiling upon us?
The Lancaster police are delighted that they apprehended a wanted man by randomly detaining a Liberty Tax mascot. And they are actively on the lookout for another wanted man who reportedly resembles a Liberty Tax mascot.
It would be natural for law enforcement to now conclude that they should detain and do a warrant check on every 40-something man dressed like a Statue of Liberty.
Liberty Tax franchisees would be wise to do a little extra investigation on their mascot personnel, at least to be sure they have no outstanding warrants and aren’t listed on the sex offender registry.
They would also be wise to pack, not wear, their Lady Liberty costumes when travelling by air.
The age of mascot profiling may be upon us.
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January 12, 2011