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LIBERTY TAX Fraud: Preparer Could Get Prison Time

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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Also read:

LIBERTY TAX SERVICE Franchise Complaints

Contact UnhappyFranchisee.com

Comments

28 Responses to “LIBERTY TAX Fraud: Preparer Could Get Prison Time”

  1. TexasTee says:

    Yes, its prevalent.

  2. Trisha Grabert says:

    See my head nodding in agreement on this completely that it is trained thru 2010?
    See my screen when I turn it to you?
    See my body language, sighs, nods and expressions as the client answers the interview questions…I will give you more time to remember?
    See the refund meter when I turn the screen to you when I choose to and watch your attention go from owing to growing refund number like a slot machine and go up and down, while we allow the client to recall and recant expenses and income until they hit the sweet spot and “maximize their refund” and give value in the sales price we charge per form? We can take that form out if you want to pay cheaper but OH that drops your refund to so much lower, see?
    See we don’t need any proof of your records as they are for you to keep because “it is between you, God and the IRS”?

    Stand up and testify- All of you 2010 and under franchisees if there are any left by now.

    One way to even the score is to go after preparers and not just the zees deemed as “rogue” now. So it seems the Liberty Tax defense strategy is becoming a bit more well-rounded and spread out on their counter attacks.

    Has anyone been aware that John Hewitt and Danny Hewitt are the one’s under the largest investigation? But this story is important, because it shows just how low they will go to keep focus off themselves. They will throw their own under the bus with American flags hanging out each window as no one will hear the thumps through the cheering of ringing the Nasdaq Bell, starting a sign spinning company for little Danny to get his back taxes paid…..and on and on….

    As long as Danny keeps doing things dad’s way, he will continue to pay his severence, legal defense and allow him to be a sign spinning vendor to replace wavers, because “that is how they hewitt”. It is time for the Danny to speak out as he did to me, yet, he sits in silence and selfishness all this time holding each other under blackmail. Only Danny has the power to blow the whistle on daddy CEO and stop the insanity; yet he is chicken because he is now making more $$$ since he resigned. Bankrupt, loosing cars and homes and territories swiped by your own father gets old like asking for rent money when he was busting his rear end on salary. He…..”have kids you know, can’t just come out like that and risk it all until the right timing.” Yet, he sent messages such as “You did not deserve what they did to you” to show his compassion. Who has any compassion for all the people that have been trained using closing the sale techniques which now includes preparers to even out the franchisees (zees) they have attacked? Now let them make a webinar called, “HOW TO NOT GET YOUR PREPARERS NAILED TO THE CROSS”, so they can appear concerned. It is disgusting what they are doing but Danny must not be ready to speak out, only make new friends and client’s for his own interests and very quick money by networking through Liberty Tax before the walls cave in because HE has kids to send to college and we did not? His words to me end of April 2012 was “I don’t speak to those people anymore and not with the company, I got tired of seeing this happen and everyone get screwed over as I did for 1.1 million.” Well that statement got blown all to Haiti, now didn’t it? He sure takes plenty of trips and friends many new franchisee suckers rebuying stolen territories.

    -Trisha

  3. LiberZee says:

    “One way to even the score is to go after preparers and not just the zees deemed as “rogue” now. So it seems the Liberty Tax defense strategy is becoming a bit more well-rounded and spread out on their counter attacks.”

    Trish: I don’t understand what you mean by this.

    Why is law enforcement going after preparers instead of franchisees?

    And what does Liberty Tax have to do with it? Why would they want their preparers getting charged, dragging down the LT name?

  4. Trisha Grabert says:

    It is not dragging the brand name by doing this. It is helping them. They are not telling their current franchisees or the public about their federal lawsuits and investigations going on right now and heated up with new evidence. They are quick to announce on znet about when OTHER competitors are in trouble as they know so much about it. Why do so many franchisees sue Liberty by their 5th season is another question you should be wondering about. Why have they sent many franchisees renewal contracts saying ” I forgive any wrongs Liberty has done in the past and will not sue anyone”, yet don’t tell what they did wrong? As a part of their ongoing defense strategy, they need to show a nationwide epidemic of “rogue” employee, zee and now, preparers spread out more evenly between territories, because a pattern over the years has now been noticed by the head authorities. John Hewitt made a comment in the press that he has never seen a CEO have to be responsible for franchisees’ actions.The DOJ and IRS have been led for many years to people and diverted from the main investigation of scheme promoters, John and Danny Hewitt, intentionally. Look up what an IRS 6700 investigation is. Once they noticed the same pattern with the competitor names before and after Hewitt was kicked out, (yeah they fired him, he did not sell Jackson Hewitt and he kept plants inside Jackson Hewitt until they came work for him recently, such as Mazer and Wheaton) then they changed their defense plan to now include showing there are also just bad preparers who they claim were never trained by Corp to do things a certain style to close the sale, and not just bad franchisees and trainers. It is also another intimidating way to get the franchisee not to talk to the IRS, as hundreds have, about their training with certain people such as Annie Fuller and others. Liberty Tax stole her territories and DMA back by terminating her contract, regardless of her intimate relationship with the CEO like Martha O’Gorman and others, not standing by Fuller, and is suing her for(can’t say) as well and claiming they are “disgusted at her training and had no idea of her teachings and was not present for certain training sessions” which is false and angered the IRS. LT could not even provide a roster and denied certain boot camps and somehow lost all their conference calls and emails that existed in 2007-2010 involving her trainings and speeches that the IRS requested. The cases are still pending quietly, such as a new opening of the South Carolina case for racketeering based on new evidence (RICO case of clients against Liberty Tax). This case is a large threat to their financial position on both civil and criminal levels and they won’t be telling anyone on the fan bus about it and keep prolonging it as much as possible for a decision to settle or let it go to jury trial. They are shorting their own stock and need to keep turning and burning territories quickly by reaquiring and reselling old territories and getting rid of older franchisees that may be called in as witnesses if they were in the system before 2010. This has been going on since mid 2010 when they gagged Annie, then bribed her to testify falsely and she did, then they sued her anyway and never paid her their agreement of $300k. That is why Annie does not speak to anyone and soon they will gag others or try. Anyone interested in talking about their experiences with their trainings and ethics concerns, please contact JerryArrington at IRS dot gov. I don’t care how they come out on their lawsuit, I have the truth and proof. They are dirty and getting sloppy so they will take your first born to save their tail right now from crippling losses and a shutdown. You may contact me by writing to Admin on this site for permissions to share email address if you have more questions. Once again, I must remind Corporate they are not allowed to speak with me directly or indirectly about the RICO case as it will be considered intimidating a federal witness AGAIN. –Trisha

  5. testaipira says:

    How come F&D-Tard and Mike, Stained Dress Trisha haven’t posted this yet….

    Nasdaq stocks posting largest percentage increases
    Top 10 Nasdaq-traded stocks posting largest percentage increases
    Associated PressAssociated Press – 2 hours 12 minutes ago

    Email
    23
    Print

    Companies:

    CollabRx, Inc.
    Insmed Incorporated
    Oconee Federal Financial Corp.

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    NEW YORK (AP) — A look at the 10 biggest percentage gainers on Nasdaq at the close of trading:

    CollabRx Inc. rose 38.0 percent to $5.23.

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    Altisource Ptfl Sol rose 11.1 percent to $114.10.

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    Mattress Firm Holdings rose 8.6 percent to $32.76.

    BroadVision Inc. rose 8.1 percent to $9.66.

    Synutra International Inc. rose 8.0 percent to $5.15.

  6. bill says:

    I guess because the stock is still below it’s initial asking price of $14.00.

  7. testaipira says:

    Looks like it went over today….

  8. testaipira says:

    Board got quiet. Company will be bigger than Jackson Hewitt this year and on it’s way to be number 1 by 2020 now that they will be in Wal-Mart all over the country.

  9. guest13 says:

    You need to worry about Jackson Hewitt. They are quietly on the rebound. Starting to use Liberty tactics for free advertising. I think their next move will be a price war, if they can figure out how to afford it.

  10. mike says:

    The tax industry is only growing for the free places and the self prepared. Free at: (AARP, VITA, Schools, Universities, Liberty Tax, banks, credit unions, military bases,check cashing places etc the money to be made is rapidly disappearing! Stay away from this dying industry just look at all three companies: Block has been decreasing in returns, Liberty is growing because franchisees work for free, Jackson Hewitt is all but done, If you are considering investing in the tax industry DON’T, do your homework!

  11. SanFranDan(Danielle) says:

    Trish:

    YOU GO GIRL!!!!!
    This company is a SHAM. Anyone reading these posts before signing on as a Liberty Tax Franchisee……..RUN……..don’t walk…………..RUN the other way. It will destroy your life. I cannot be more serious. The man at the helm is a bastard and should be locked away for years.

  12. guest13 says:

    The tax industry is not dead and it’s not dying. It’s very competitive. The ‘store front’ tax business has no growth potential. If you don’t have a tax background, don’t try it. You will have a hard time finding tax preparers and supervisors/managers. When you look around your area for franchisees, don’t forget to also look for the mom and pop offices. You will find them everywhere.

  13. Gary says:

    I have done taxes at LT for 4 years .

    Ni one has ever encouraged me towards these practices. In fact the opposite is true. If you knowingly file a fraudulent return you are fired.

  14. Scammed1 says:

    Fraudulent returns are a way of life at Liberty. Even though they have actively stopped teaching the methods of refund maximization, their Zee’s are still doing it. Hewitts have figured out the government is after them, that is why they have changed their training techniques. I’m sure there will be more franchisee’s in this fraud bucket… Stay tuned….

  15. TedBills says:

    @Trish – Hewitt passed away a while ago…..

    As for anyone else calling out Liberty, maybe you’re right & they’re all scammers, etc I wouldn’t know for sure. But in my experience as a CPA, all the franchise preparation services have some decent preparers that care to do their own research & learn, as all have plenty of bad apples as well. If you’ll recall H&R Block was equally as anxious as Jackson-Hewitt to offer those outrageous rapid refund fees.

    I mean there’s also plenty of scam-type CPAs out there, but at least a CPA does feat losing his license. Hopefully the new regs on registered preparers will put the same fear into the franchise staff, and at a minimum at least they must pass a test and meet CE requirements. 14 years ago I tried to work at one of the chains as a freshman in college and while chain X “required” each preparer to do “30 simulations” prior to being put on a schedule, I can assure you no one in “my class” did any simulations, we simply sat through a 6hr lecture & I was ready to prepare taxes?
    Not even the auto computerized questionnaires could make me comfortable enough to do anything correctly so I quit halfway through my first shift.

    The saddest part in all of this is that all the Liberty taxes of the world charge just as much as a small legitimate accounting firm would charge, except with years & years more experience & knowledge.

  16. Paul says:

    Do any current, or past franchisees have any details about training related to the “satisfaction guarantee” ?? A franchisee I’ve been dealing with outright refuses to honor it, without any explanation, etc …

  17. Scammed1 says:

    I never received any training on satisfaction guaranteed. It was never emphasized.

  18. Trisha Grabert says:

    John Hewitt is not dead, he just looks very tired. Maybe he is wore out from the recent Las Vegas trip or obessing over these posts?

    Also, the testing was suppose to be oh so hard, it was as hard as renewing a $63 fee this year after all now, so those rules are not in affect after all. It does not take much to become a tax preparer.

    The stocks, let’s not play that casino. You know as well as the rest of us what the inside info is on the options.

    @Paul…The satisfaction guaranteed is posted in all offices. If unhappy for any reason, call Corp who will refund preparation fees and charge the franchisee on their A/R accounts whether they agree or disagree. It is just what is says, a guarantee and should be honored and in my experience…I paid dearly for refund of fees, penalties and interest assessed without regard that some client’s lie which causes an audit with assessment of penalties and interest on top of tax preparation fees. One client in particular did not tell me he built his business building on his dad’s property, was judged against in an audit and those expenses had to be taken off his return and it cost him money. It cost me over $2500 regardless that the client lied to me about ownership of the building and rights in full. His name was Jason Weihe. I should not have had to pay for it, but as the Area Developer explained, I have to and I will and they intercepted it from my accounts to repay Corporate for honoring the 100percent money back guarantee. The customer does not have to be right because as Stacy Barnes trained me, bad word spreads faster than good word, so it is best to lose one and gain many more, than to lose many just to be “right” about something.

    Hope that helps you, Corporate should be happy to honor it for you. Call them and get a ticket # because they use a call center and you need the reference number when you call to followup. You are suppose to get a callback within 24-48 hours resolving the issue you have.

    As you see, I have been trained well in Liberty’s customer service practices and I can share what their policies are. The wall posters and website tells about the guarantee are still hanging and in effect in all offices today. There are no added clauses that say anything near, money back only if we decide you are right . :-/

    -Trisha

  19. Keith Barry says:

    ha!

  20. Thomas Johnson III says:

    As far as those that feel that LT is going to beat JH, ya’ll are slightly mistaken. Walmart has signed another deal with JH.

    As far as the CEs for tax preparers, it has been squashed by the court (for now). However, I feel that all preparers (paid or not) needs education on taxes. How are you going to help the client (legally) if you don’t know anything.

  21. Taylor.J says:

    I work as a tax specialist in the Chickamauga, GA Liberty Tax location, and first of all I would like to say that I am so sorry that you had a bad experience, and on behalf of Liberty I invite you to try us again. I don’t know about any of the other franchises other than my own, but I hate to think that there are people out there giving Liberty a bad name.
    In my store we are 100% dedicated to making people happy with our service and making every life we touch better. We have the kindest owner and team leaders, and I have no doubts that they are here to help and guide us all forward into success with them.
    This is a company with a great deal of room for growth and the drive to make it happen; our entity alone will double in size for next tax season, and we are in a fairly remote location! I can’t imagine how much success someone would have with a team like ours in a bigger, more populated area.
    For anyone reading this who has never been to Liberty, please don’t see negative comments and be afraid to try us! Unfortunately our brains are wired to remember the bad more than the good, so believe me when I say there are raving fans out there! Here at Liberty we are concerned with our clients, not their money. Customer service is our #1 concern!

  22. SanFranDan says:

    ^^Really happy for you Taylor J.

    But unless you are a franchise owner with Liberty Tax and you have to deal with Corporate, then you have not really experienced what so many people with negative comments here have to say.

    Most of the people on this website are current or past owners, not employees. That alone makes a huge difference.

  23. Anonymous Glenn says:

    Liberty Tax will not become number one. Now they’re trying to push selling health insurance. That’s like going to Toys R’ Us to buy a car.

  24. Guest says:

    That’s what you would say if you don’t understand the ACA. Hrblock and JH also offering health insurance.

  25. Franchizee says:

    I hope they have insurance licenses and don’t get caught by the IRS for a conflict of interest. Also in ACA, the feds don’t want to pay commission if sold by an insurance agent. That is a fact. Too bad, people are wasting their time, but that is the LTS way of life. John Hewitt shining at his finest! Another waste of time and money for franchisees. I bet if you have a loan with LTS, you have to get the license and sell even if you don’t make a dime and could get in trouble with the IRS for a conflict of interest.

  26. bill says:

    John Hewitt has always talked about tax credits and how they benefit the tax preparation business. Mainly he was referring to the Earned Income Tax Credit and the Child Tax Credit. Both of these credits are refundable and can be easily manipulated by including other family members unclaimed dependents and/or creating schedule C income.

    The ACA is creating a whole different situation. It could possibly result in the taxpayer receiving less of a refund. Which will impact their decision to incur high fees to get less money back. The projection is 1/3 of the people receiving subsides will have to pay back a part of their refund.

  27. Guest says:

    ACA is much more complicated than that.

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