LIBERTY TAX SERVICE Franchise Complaints
UnhappyFranchisee.com asked: Are LIBERTY TAX SERVICE Franchise Owners Happy? If you’re familiar
with the Liberty Tax franchise, please share a comment below.
Entrepreneur magazine has ranked the Liberty Tax Service franchise #3 behind McDonald’s & Subway. However, some commenters who claimed to be former Liberty Tax franchisees left stern warnings on the Franchise-chat forum.
This post was originally published
BostonTax wrote:
I’m a former Liberty Tax Franchisee
I hope you are ready for a little enlightenment! I held a successful Liberty Tax Franchise for 5 years until I decided to let the franchise agreement lapse. I did this for a few reasons:
1. The royalty fees were outrageous! 14% went to normal royalty while and ADDITIONAL 5% went for so called advertising royalties. The ad royalties were supposed to be put back into your local market to build the brand name. This was never done! All advertising in addition to the ad royalty I had to pay for because it did not fit into Liberty’s concept of advertising. I don’t know exactly what the concept was because our AD could not give an answer and the approved methods changed by the week.
2. Corporate was totally unresponsive to the needs of the franchisees. The AD system is designed to recruit anyone who can write a check for 100K. No other skills or ability required.
3. The minute you are behind in a royalty payment, they send you a notice to cure. After that, if you don’tpay, they try to terminate your franchise agreement.
4. Upon termination, Liberty enforces through legal proceeding a 2 year, 25 mile radis non compete clause that is in the franchise agreement. This is enforceable in the Eastern Division of the Federal District court, where, at least 2 Liberty friendly judges preside.
5. Liberty does not recognize chargebacks for bad debts as an adjustment for your royalty fees. All royalties are based on your gross, not your net collectable. This was an ongoing issue with them and the accounting department did not have the ability or the inclination to resolve!
My best advice is do not go with these guys, they are bad news. If you like to have people collect royalties and provide no support, then this is the franchise for you! It is very expensive to get into, the initial fee is around $32K just to buy the territory plus those pesky royalties. You can’t make money on this concept.Most of the surviving franchisees I’ve talked to in the last 2 years have experienced great difficulty not only in making a profit, but in the corporate support or lack thereof.Remember, 19% of your gross is getting kicked back to Liberty, which is excessive by any standards. Please do yourself a favor and call former franchisees ,those that are currently getting sued (they are very likely to talk, as I found out), and current ones to try to get the straight poop.
Barbara Green wrote:
I too was a Liberty Tax Franchisee and I agree with everything you said.
The only reason for purchasing any franchise is because the business model is a proven marketing success as evidenced by the profitable franchisees. That is why you pay a license fee of $25,000. Being profitable is not in the cards for a Liberty Tax franchisee. Liberty Tax’s market/ business model is aimed at individuals who have very simple tax returns, i.e one W-2 and standard deduction which is why they were very successful in Norfolk, Va. That market is full of military people with one w-2.
Liberty will sell anyone a franchise at any location, in any georgraphic area, even if there is not a chance in hell of the franchisee being successful.
At one time, I too owned a Liberty Tax Franchise for one tax season. It was only one season because of the behavior of the Regional Manager who called me on January 15th demanding and screaming “Why had I not generated 200 tax returns and that maybe this business was not for me. I was stunned and confused since employers are given until January 31st. to give w-2’s to employees. Apparently, he thought that I was in Norfolk, Va. where that is possible.
It only goes downhill from there. The bottom line is I lost all of my investment in this businees (approx. $80,000) because I closed it rather than becoming a victim of this unethical company. NOthing would make me happier than to be a part of a class action lawsuit.
WHAT DO YOU THINK? DO YOU OR HAVE YOU OWNED A LIBERTY TAX SERVICE FRANCHISE? ARE LIBERTY TAX SERVICE FRANCHISEES HAPPY? WHY OR WHY NOT?
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oh, by the way that is not a good sign for anyone since H&R has been advertising like crazy.
Liberty Tax’s parent company told to pay 1.3M in ad case
Jan 19, 2013 (Menafn – The Virginian-Pilot – McClatchy-Tribune Information Services via COMTEX) –Virginia Beach-based JTH Holding Inc., the parent company of Liberty Tax Service, must pay 1.3 million in penalties over misleading advertising, a California appeals court ruled this week.
The appeals court ruling Thursday upholds a trial judge’s finding that Liberty deceived customers through two services: refund anticipation loans and electronic refund checks.
The trial judge in San Francisco found after a nine-day trial that Liberty falsely portrayed its refund anticipation loans as tax refunds from the IRS. Liberty also failed to educate its staff about the legalities in advertising and failed to control its franchisees, the judge said.
The trial judge ordered JTH to pay 1.17 million in civil penalties plus 130,000 in restitution. The judge also permanently barred Liberty from advertising loans as tax refunds.
That is interesting. I wonder why this never showed up on Zeenet? I have signs from Potato Head’s that state “fastest refunds”. They never were refunds, just loans. I still have not used those signs being that they are false advertising. I had to educate people over the last 5 tax seasons on what they are signing, since they were all under the impression they were getting their refund and not a loan. Some get upset because I tell them it is a loan and not their refund. Some leave and go to other franchisees to get their “refund”. Better them than my business.
NC Hillbilly:
Thank you so much for letting us know this latest development! :)
I could not be more THRILLED to see harm coming his way. Hopefully this is just the beginning of his downfall & crash, yes!
I can’t wait for him to get what he deserves. They better make sure they get him before he goes to his private island with our money.
He has ruined the lives of so many people across this country………I for sure need to see justice done and for him to be in jail forever. Happy dance.
There is also a multi state lawsuit against LIberty based on the same issue. According to the Company financia statements they project that the case could mean fines of $5,000,000.00 but they say that the company behind the financial products maybe liable. But as Franchizee points out all the advertising is approved by Liberty. Their the ones who apporved the signs by companies’ like Potato Head so how do the push the blame on the people who make the loans?
@Bill – Which states is this lawsuit in? Is the one with Annie Fuller’s office?
I’m not sure. According to the article about the CA decision they mention that several other states where suing Liberty for false advertings. The states included Wi, IL. MD, AK, NC and a couple more states. Becauese of the number of states suing someone decided it would be more practical to have them join together. Liberty discloses they are being sued in their 2012 financial statements but try to downplay it by saying the lenders would be liable. I believe the “lender” comment is not accurate since Liberty approves all marketing material!
42 years of slick snake oil……..hope the IRS and Dept. of Justice gets him good! He is a professional con-artist and he has swindeled so many people out of so much money, time, hard work, headaches, and so much more. Sounds like another Ponzi scheme to me.
This man orders his Lawyers to keep at it and keep at it and keep at it until someone breaks down and gives in. He tortures franchisees and is relentless. How the hell did he get so powerful without anyone noticing all these years???
I so hope his game is over. I so hope this is the beginning of the end for him and his fall. I so hope he comes crashing down big time. The amount of harrassment by him and his cronies is unbearable. Who the hell ever thought that by PAYING for a franchise, this is how he would treat them?
He was already thrown out of HRB and JH, now he needs to be thrown out of LT and locked away forever. Seriously, folks.
ANYONE reading this website, hope our comments have been enough to deter you from EVER getting involved with this schlock operation. Hope it is shut down permanently asap.
It is interesting reading the legal cases against Liberty – AKA JTH Tax, Inc. http://www.leagle.com has a lot of cases. JTH Tax is very sue happy and uses it freely. It is a matter of time before they lose their shirts. I did notice they lose when they have a matter with customer’s not franchisees.
^^^Interesting, huh, francizee………that’s because the Judges’s in the Eastern District Court are most likely paid or compensated somehow on every Liberty cse before them, which is pretty likely close to 100% in favor of LT. Yucch. We needed a Lawyer down there and it took forever to get one because not one them wanted to go up against JTH. They knew they would lose the case.
Sue Happy is a huge understatement. I know the shutdown is coming and I am waiting with anticipation. He has turned my life upside down and my children have grown up listening to this around the kitchen table at dinnertime.
I cannot imagine a more hated person in my life right now. As I said previously, I have never wished harm on anyone except this man and his top team. And I mean big harm. JAIL for life. Money to be sent back to those he stole from. Company and his reputation destroyed as he has done to so many of us.
Franchisees have brought suit. Not all have lost. Most make small mistakes that become huge and then they give up their own case. A good attorney is a must. You have to have the right verbage and not get hung up on contract traps. The contract can be disputed but there are easier ways to be heard.
However, they will lose all the money not hidden to feds who comes first, so get your lawyer on contingency.
Besides, I was told people hide money for him in their names such as Martha and several of his community women. His own family told me things that even the feds will be lucky to track. We are not dealing with a rich company, we are dealing with a paper company the only cash is stashed for John and those few people who drug him out of bed to move on after Jackson Hewitt fired him from his own name.
-Trisha
Trisha – That is what we have suspected, that this is not a company at all and definitely not a tax preparation company, it is just a front for something else, possibly money laundering or something similar to that. Can’t put my finger on it, but it is not in the business for tax preparation due to the fact of their lack of concern for the average tax payer and definitely not one concern for the franchisee who pays and pays, with nothing in return, except, if you are audited by the IRS, just let us know and then let them know the outcome. No support. Been in a business similar to this and it was a way to funnel money for the owners. They are still in business doing the same thing.
I felt that this was some sort of racket all along. Hewitt and cronies are siphoning as much money as they can out of the company into their own pockets. Look at those that have been with him for a while, such as Martha, Sue, Vanderpool, Lawyers and any other VP’s. Of course he is laundering money, our money and the governments money. He has been doing it for years. Usually a racketeer like Hewitt goes to jail eventually unless the right palms have been greased, which apparently is the case. It seems to me that all of us franchisees are the ones getting screwed, call it the “John Screwitt System.” I wonder if the stockholders are wise to this scam? Maybe they have been duped like the rest of us. Does the SEC know of this company’s practices? If enough of us complain to the SEC, they might actually have to launch an investigation. Wouldn’t that ruin Hewitts day?!
lookout now Richard Artese has joined Liberty Tax as a Regional Director. He helped drive Geeks on Call into the ground according to some franchisees.
Check out: http://www.unhappyfranchisee.com/geeks-on-call-franchse-richard-artese/
Here are some comments from elsewhere on this site:
“As long as Richard Artese is part of this organization, I would highly recommend not becoming involved with this venture.
“The original concept was a sound business model until Richard Artese and Richard Cole took the company down a very unethical path…
“The company has fallen far from those days with Artese running the show… There have been many failures and many people have lost money… .
“My advice …do not do business with Geeks On Call while Richard Artese is still involved due to ethical reasons.”
Another one here:
“…how many owners, out of the 300 plus franchises originally sold, this franchise lost while Rich Artese and Richard Cole ran the company. How many owners filed lawsuits against Geeks on Call America or its executives, how many walked away with their customers under a settlement agreement and how many transferred their franchises back to corporate or to another franchisee in order to get out of their 10 year agreements?
Next I would ask how many franchise owners out of the approximately 57 franchise agreements taken over by Rich Artese and new CEO Glenn Davis after foreclosing on Geeks on Call America are still left. How many of the original owners of these agreements transferred their franchises back to corporate or to one of their own techs since the new CEO taking over? ”
Richard Artese joining could be one more reason to steer clear of Liberty Tax. Looks like he’ll fit right in to the corporate culture.
What were some of the things that people were told when purchasing a Liberty Tax franchise? I was told, I would be a millionaire within three years and could quit my current career, that the first season I would do about 600 returns and with three season I would be over 1000 returns. Of course it never amounted to even close to those numbers. I would have 8 mos off, which of course nothing was mentioned of free tax school (what a joke, being free and it being a school). Nothing about doing a fake P and L every year and budget that is mandatory. What have other’s been told and not been told. This is where the fraud and deception is going to come into play. Also the call I listened to with John and his good Christian sayings and sounding moral and ethical, was just a smoke screen. One other thing, before Danny was let loose, he was on a call and was telling us how we can go into section 8 housing and set up classes to have anyone’s kid be on a tax return and that person would be your customer for life….Boy I sure do miss those days of down right hilarious redlining and every law breaking of ethics….
“racket”, good word, because that is exactly what the class action suit in South Carolina mentions….Racketeering.
@ Franchizee,
Remember the “Don’t sell your kid” campaign on conference calls with Annie Fuller before Danny got on to talk about visibility and “FREE WAVER LABOR” by calling it auditions so that you had wavers in time blocks at all times in front your stores with their poor hopes of getting hired? Then John Hewitt would close the calls pretending to be on a plane and say reinterate for us to listen to them.
Don’t sell your kid- People are known for getting EIC through other family members who have income (w-2’s) and having that brother, mother, aunt or parent claim their child on their tax return and then “split the refund”. These would get caught alot from the IRS and result in non-pays as people got letters from the IRS saying PROVE these kids lived with you. It could not be done through school records, so….to combat the ratio, why not file a schedule C for money given to you through the year and call it an occupation?
Free wavers: I have an email I sent to my AD, saying this is not legal with any Labor Board to endorse free labor by fooling people to save money on our budgets and then never pay them for the 2 hours each one of them audition in front our stores. I refuse to let me employees listen to these trash conference calls anymore, so expect my conference call attendance (a requirement of being financed) to be low. He replied, I will have it taken down or it will roll off in a couple days anyway from the intranet site.
Well, replays were not taken down. You could still search for them a specific way on znet and they did not calm that type of budget saving frenzy down.
On P and L and budgets, the AD would fill those in to make it fit and nothing you ever turned in as the real numbers were submitted. The truth just does not fit in with the system. So you have to keep your real budget handy and then the one they give you aside so you did not overspend and over-project.
It is illegal for anyone to tell you that you will be successful in your contract. Besides what has been told to you, why send us daily projections of what Corporate predicts will be your foot traffic for day by day, store by store? That is the same thing as leading us to believe we will have numbers for the day given to us by their experts who base it off whose predictions?…Corporates.
-Trisha
@Trisha – We are on the same page on everything. I am in a career that is regulated to the hilt by the state and the feds. We know the ethicial and moral reality that this company is not ahering to.
Just had a grandmother come in a little bit ago to claim her three grandchildren for EIC. So with the new regs from the IRS, she was getting nervous. Of course I told her, there is no way for me to even know these are her grandchildren. None of the names match, no info that they live with her or who is the mother and father. I told her to bring in 4 different item’s for me to look at them to make sure I feel comfortable even submitting the return. I won’t submit anyways….I doubt I will see her again. Her other daughter needed money yesterday, nope nothing I could or would do for her.
My P and L have been horrible and I have been funding this POS and the bleeding is stopping by the end of this tax season. This contract has not paid jack at all. Luckily I am wealthy, but I choose not give them anymore money….
We were wondering if the people on the daily calls were serfs to Liberty. Thanks for the info.
You are correct, free waving is illegal and not to mention the work comp issues, of having someone on your area without coverage. These people are the dumbest set of people I have ever met. They try and break every law there is. I spoke to a guy in home office several years ago about CIF and I gave him all the laws with SEC that make it illegal. He told me, well John would never do anything illegal, if it was illegal. I told him, he has no clue if it is illegal nor does he care until he is caught. That person at of home office quit Liberty within 2 mos of our conversation!! Plus John has never worked in a highly regulated business nor been licensed where regulation is in place…
I don’t know if any 1st year franchisees have found this site but if they have this is the time to contact an attorney and get out of this contract on the grounds that the company failed to perform. I did speak to an attorney when I was involved with Liberty but I was in my third year. According to the Attorney if it was my first year that he could of gotten me out fo the contract based on things like site section, technical support and advertising.
I called a couple of new locations in my area but neither answered. Hopefully they backed out.
In an article on yahoo JH is saying that Liberty stores will be open from 6am to Midnight. These poor franchisees can’t make payroll as it is and he has the open from 6am to Midnight. Dosen’t matter to him if you do one extra return per day that is one more fee he hopes to intercept.
No one ever walked into my store after 7 PM due to the crappy neighborhood we were located in. These people don’t even wake up before 10 AM! Give me a break-When my store had the April 14th pajama party, one bozo walked in stinking drunk and yelled obscenities at my employees. We had to call the police. Even the cops scolded us for being open so late in this neighborhood.
@Bill – Ya, right I ain’t open. My area, they close up the sidewalks by 7:00pm. We keep getting blocked calls, unavailable and private calls with no one at the other end.
@Texas Tee – I had an office in a bad part of town with a bunch of drunk and stoned people. I wrote a couple tax returns in three years after 7pm – I can count on one hand and rarely anything on Sat. At least you tried, I gave up and don’t conform to “LIberty Culture”! It is my culture not there’s.
Can anybody stop Hewitt’s fraud? Not only does he dictate what to do, he tells you how to do it illegally. The budgets I had to make were always bogus, the AD idiot would send them back to me rejected or the ‘budget committee’ wanted less expenses and more revenue. They even went as far as to tell me to exclude royalties from the budget because they were ‘automatic’, what ever that means. The budget process is a joke and produces more meaningless paperwork than anything else. Then the AD hammers you during season that you have not met a number in the budget. When you tell the AD that these are bogus numbers anyway, the AD gets all bent out of shape. This is as frustrating as working for the government or dealing with the IRS.
Has anyone heard anything about the on going investigations of fraud and etc by the IRS against Hewitt and his group of thugs? I’d be interested in knowing….
@scammed – Trisha has mentioned something is going on. Our P&L is always adjusted to fit their fantasy of a business model. The number’s bogus and irrelevant, since so many are not paid on. Last year, when we would get those email’s, it was like WHATEVER.
Does anyone make any money with Liberty? That is what I can’t figure out, I do know people borrow from them like there is no tomorrow.
LT and JTH ARE FRAUDS!!!
LOCK HIM IN JAIL FOREVER AND THROW AWAY THE KEYS….SOON PLEASE!!!
MAKE SURE YOU GET HIM GOOD. FIND HIS “HIDDEN MONEY STASH” WITH ALL HIS GIRLFRIENDS TOO!!
HE IS A CON-ARTIST. ARRESTING HIM DURING TAX SEASON WOULD BE OH SO SWEET.
RACKETEERING, PONZI SCHEME, YES, HE FITS THE DESCRIPTIONS TO A T. I AM SO SORRY I EVER CAME INTO CONTACT WITH HIM AND THIS SO-CALLED COMPANY.
I HAVE LOST THOUSANDS DEFENDING MYSELF. AGAINST WHAT??? I PAID THE MONEY TO A FRANCHISE THAT I DEFINITELY COULD HAVE JUST STARTED ON MY OWN, EASILY. THIS IS NOT OWNING YOUR OWN COMPANY, THIS IS LIKE A DICTATORSHIP WHERE EVERY MOVE IS MONITORED AND CORRECTED.
THROW HIM OUT NOW!!!
I whole-heartedly agree with San FranDan. These Liberty people are outright crooks. Look at how many of us have posted to this forum. That should tell you something right there. As with a lot of us, I paid a lot into the Liberty system only to get bilked out my retirement as well as and earnings I made while a franchisee.
Put these crooks in the slammer!
So, does anyone make any money that stays in their pocket with Liberty? I have only paid and paid and only my leasor, employees and Liberty are making money, I have nothing to show for all this work for paying to have a Liberty name, which by the way sucks!
@scammed,
The Dept of Justice and IRS has built their case. The IRS is civil prosecution, the DOJ is criminal. They are now working together after hundreds of interviews and thousands of documented evidence and witness testimony. This is separate from private law firms taking action for classes and individuals. The DOJ would be the ones with the cuffs. They NEED everyone’s story. J Arrington direct line is 1-828-242-2122. He reads this site. You have to reach out to him because your identity is protected from Corporate through ADMIN who will not disclose the users on this board who don’t give out their names. As you can see, I don’t care….John and his cronies know exactly who I am and cannot touch me.
Also, let’s not forget John Hewitt is a felon. He broke in houses and STOLE from an early age. That has not changed. His criminal record was disclosed to me by his own family. He cannot even get an EFIN.
Let’s also not forget that besides, racketeering, laundering, acting as a bank institution, illegal advertising lessons along the way…his worst crime is facilitating fraud through early season clients by training trainers to coach us into several things to get maximize refunds or lower tax liabilities in order to obtain high tax prep fees. Bottom line, that is his crime to America and the Treasury. Billions of underpaid taxes paid in from the American people due to facilitating fraud through tax preparation. Billions if not Trillions not paid in and shelled out from the IRS to people who did not deserve refunds that the IRS could not catch. The percentage they catch cannot touch the amount that slipped through when the IRS was not tipped off to take drastic measures year over year to prevent everything from tax fraud to identity fraud to everything else John Hewitt could throw their way and deter their focus on what was happening. The IRS knew people making 4k at Mcdonald’s could not be getting 8k refunds. They had to jump through hoops to focus on regulating the debt indicator flag, which was encouraged by guess who!! John Hewitt and HR Block…..why? So they can continue to do what makes them fast revenue by EIC fraud encouragement and the non-pays that resulted from the disappearing debt indicator has so much involved that those losses to the franchisees was NOTHING compared to what he raked in on the facilitating fraud campaigns. The support we got from tech was more focused on interview questions that interrogate client’s into answering in a way that made them not even know they are filing fraudulantly, much less the preparer to know. I am pretty sure Turbo Tax does not say, “did you operate a business on the side because it may help your tax return?”. But his trainers made sure we asked to see prior year returns so we can ammend, ask probing and leading questions with head nods, etc…so that we can be “superheros and let US do the work for you now” to save the day. What other tax offices have you seen people say, I just came from HR block and they said I owed 20k and now you telling me I am getting back 10k!! ONLY a corrupt training and having all the zees drinking the koolaid believing in his ego and 44 years of tax experience and all is legal can make that happen. Only loyalty which he bought from us by offering financing and a fail proof support system that turned out to be short lived. I suppose by taking back stores, he is also protecting his children of the cult before that 5 yr mark where most audits come into place…so you think he has part of a heart? Nah, did not think so. He has to burn and turn those clients. He does not want retention on all the fraud clients, so he ticked them off enough not to come back when he refused audit assistance to South Carolina clients. They lashed back and formed a class action that will extend past the state of South Carolina if he is found guilty. I cannot even explain in a book how many tactics he planned out and never once led on to the franchisees that he was the one to set everyone up. He was the one to set the banks up to stop offering RALS. He did it all and he openly laughs at the feds because he has them spinning circles around his operations so long….not anymore. They know it all. John’s most loyal people turned him in.
Just call Arrington, trust me, he will enlighten you.
-Trisha
Don’t think for a second he won’t be financing payroll next week. He only using that as a fear tactic to the franchisees to gain loyalty back. Giving them worse case scenario, so that he can put on his cape and say….we got your back. Relief carries a big impact, just like a inflammed hemmoroid, you just count your blessing you can sit in peace again for a while and get over the trauma, which keeps YOU focused on following the system and not rocking the boat my taking time to read up, stand up or speak up. Damage control in action.
He just extended his credit on Nov 28th with Suntrust. He bought Metabank. He has funds, he needs your fear to keep you near.
-Trisha
Well, we have not borrowed one tainted dime from them. They truly wanted to finance the 2nd territory, but in the end we just paid cash for it. Of course this business makes money but once he has his take and if you are using his vendor’s whose prices are totally out of the ballpark, there is no way to have any income to make it for next tax season. Hopefully this website is slowing his sales, because this was not available when we purchased and I looked all over the internet for something negative and due to his tight control, nothing was available. Bless the people who first posted this back in 2009, because I found it a month or so once this was posted and have been following this since 2009!
@Trisha – Did you take a class from the one of the boot camps with Annie and Danny’s dog and pony show? We did not because by the time we were thinking of the fraud and illegal act’s, Annie disappeared from the daily calls.
What are the feds waiting for if they have enough testimony about these villains? We all know what was taught to us by these so-called experts: they went out of their way to show us how to maximize refunds via fraud. Since when is babysitting a reportable schedule C that can actually cause a huge refund? Specific questions such as “do you operate a babysitting service?” or “Do you do odd jobs for your neighbors?” are pretty obvious leading questions that we were encouraged to ask. As for those phone conferences that always seemed to take place at 6pm, they were the same fertilizer that Hewitt and cronies have been spreading for years. They want their high royalties now, during peak season. They do not want to give you the chance to take your money and run. As for the 600 returns they schedule to do in your first year, you’d be lucky to do half of that. This is a system designed by a rat to remove money from our wallets.
Just curious, for those of you that are still involved with Liberty, has the delayed e-filing affected your early season numbers? I always felt that the longer people had W-2’s in hand, the greater the risk they would find a cheaper way to get their refunds without using a Liberty or HR Block.
@ Franchizee,
Yes. I attended the Annie and Danny show and John Hewitt was there. I reported and turned in all my notes/docs to the feds including emails and texts to my AD and others. Danny visited my one of my stores and took a day to train my marketers and assess my visibility to give improvement tips only and he did not speak at the boot camp trainings about tax preparation the way Annie and John presented. I was completely honest about my experience with all of them from AD level and up. Every email, every text, every meeting noted. Most of them, Corp denies all those people were there or that they ever rented the conference centers at these cheap hotels we all fit in like sardines. That’s all you can do is be honest. We did not train ourselves. When I started, I did not even know why people pay taxes. Boy, was I excited to learn from the grandfather of the tax industry! I attended everything I could, including private dinners with John and Annie. We shared desserts and fast track tips that made me a top gun my first year. I was flown to Vegas to have an interview with John before he even offered the Corp job to Annie with a salary and expense account. Thank God my kids and health were more important than a travel job on “public speaking” with no guarantee of when I can be home. Annie had more flexibility on her schedule and a few less closed buttons on her blouse. She won poster child- a trophy I will never regret earning.
@TexasTee,
The feds are so involved they are going way back before the Annie and Danny show days. As you mention, this corruption has went on with different recruits over many years. Nobody is working harder than they are each day to get his complete bio and witness list. Their work is incredible and well thought out. Just watch for the media and be sure you add yourself to the interviews.His cell number is listed above. Be sure you call J. Arrington, he has added a DOJ team and he is no joke. They are doing things you cannot imagine that are already in action. Execution is the key to this type of prosecution. Have full faith, they will get their man. Not a doubt in my mind nor anyone who has talked to them.
-Trisha
@balancetrend – No one can file the forms until the IRS opens their computer to accept their forms. I have to call one person today to state we have to wait. I almost threw a computer out the window yesterday in frustration! Of course this morning there was an email from Corp about some forms are not available….GRRRR.
@Trisha – I was too far away to attend and just don’t have the same enthusiasm as others with taxes, however I have great enthusiasm in helping people reach their goals in retirement and making sure everything is correct. You got to know corp much better than I. I just don’t care to know more people and rub shoulders with anyone. I just am not impressed by people anymore, except my clients.
I just saw yesterday they filed suit against you. It is under Justia. Hope you knew that.
Despite my vehement urgings against it, my wife joined the Liberty fray and became a zee a few years ago — I believe she’s in her critical 5th year now. She was lucky in the beginning and took over a corporate store that was profitable — doing more than 1,000 returns. It is still her cash cow. She even managed to finance that store on her own rather than through Corporate.
Feeling empowered, and having established a friendship with John Hewitt himself, she allowed herself to be coerced into becoming an AD and taking over the DMA for this area. Of course this was also against my advice — she had already fallen deeply for ‘the system’ and she still believes in it highly. The DMA was financed 100% through Corporate, with no capital required from her, and she claims it is an unsecured note, though I have not read the agreement or seen whatever fine print undoubtedly lies within.
There are currently 10 operating stores within her DMA, including 3 that are hers (yes…she was coerced into buying two new territory stores — both also financed through Corporate). For now, her royalties and note payments are paid current, primarily through her anchor store profits as her royalties from the other DMA stores have not always been stellar. But she also has to get those “working capital” advances from Corporate every year to stay afloat, that she does pay back after tax season (not sure what those are called).
My biggest concern is that DMA note, which is quite large. Can someone tell what the odds would be that she would come out relatively unscathed if I can ever convince her to walk away from this franchise? Because she is very insistent that John Hewitt ‘has her back’ and has told her if things ever become too much for her, that she can simply walk away and he would find someone else to take over the DMA.
Like many on this site have stated, I don’t believe that selling her profitable store is an option (the other two are not yet profitable as both are brand new) because I don’t think there will be potential buyers. Especially because I don’t believe this to be a very strong DMA (midwest area).
Might there be fine print in that DMA note agreement that LTH can come after and take our house? I’ve been fearful from day one that her venturing into this business would eventually take her family down. Are these fears justified? I’d like to hear success stories too if there are any…just for my own piece of mind.
Thanks.
Any of you that are still in the tax business seeing any clients? H&R Block has been doing very well with the 1040 EZ freebies especially online, have talked to many individuals and that is where they say they have filed, looks like Liberty and the free tax returns – has really paid off for Block, any other views?
@Mike – According to our head honchos, we are down by 60% and everyone is very slow. I have done 1 today and maybe 1 this afternoon, however some forms are not available, so that one will be finished in a couple of weeks. Hewitt really messed this business up by doing free returns which in turn forced everyone else to offer, so here we sit and sit…….Not sure if this can be overcomed. Some other Liberty folks don’t know if they can make it through the season due to the delayed funding and having to keep borrowing just to make payroll etc.
145 legal proceedings listed on Justia with Liberty/JTH. A worlds record in litigation. No wonder the VA courts love Liberty: they keep them busy.
Maybe they give them CIF for helping them!
@Franchizee-thanks for the info, we are pretty much dead as well, however, Salvation Army, Goodwills, VITA etc. are packed, just drove by some Blocks- they have a few waiting nothing to write home about- I agree- all this “Free” returns has killed the industry-don’t think Liberty will survive either-went by two offices, no clients-but two wavers.
@ Mike – It seems the paid preparation’s feeling the brunt of this change with IRS. Our biggest office in our area is very slow, when typically it is booming. Only time will tell. I have been taking Block’s client’s in my area, but still slow. Best of luck!
@disgruntle spouse – I am not aware of the AD contract. I know it has to be paid off, but not sure of the contract that it is written on. Too bad she just stayed with her one store and left it as that instead of spreading herself too thin. It would be interesting to see if any AD’s are on this site to give you some insight.
At least she has made money with Liberty unlike most of us, just going into the whole every tax season, with no way of making it better.
Was slow but picking up very nicely. I think turbo tax is kicking tail this year. But it’s costing them a fortune in advertising. They are buying the market. IRS is releasing some refunds early. That’s a mixed message. Good luck all! If you have an instant tax in your area, expect to get some of their customers. Still up to their tricks. Not telling customer what they are being charged.
@Franchizee, I know that efile started late and forms are not yet available, but my point was that the longer people have time to think about it and discuss with other people, the higher the odds that they will find a friend/family member that can provide the same service for less money. Taxpayers had 2 additional weeks to price shop and research less expensive ways to get their taxes done; not good for the early season business! I drove past a Liberty last night, no wavers (it was still daylight) and one customer. Isnt this MEGA-PEAK?
@balancetrend – You have a good point. My office does not have a first peak, it will start moving now probably towards the end of Feb this year.
What I have noticed, that first peak people are not a business plan, and this is the part the IRS is trying route out of the major fraud area.
Remember this is suppose to be Super Mega Peak – which is going flat as I type!
Sorry that your wife got involved with these crooks, @disgruntled spouse. My experience was with multiple stores that out of 5, maybe 2 can be barely profitable. The others were such losers that losses were getting larger each year. Also, if your wife leaves, be prepared to get sued. This is no idle threat. Liberty has a very active legal department. Probably their largest department in the company. Did you ever meet any of the corporate lawyers in any meet and greet or a convention? There is a reason why you don’t see them: Liberty is afraid that you would scare off with this much litigators hanging around. As I mentioned before, franchisees listed as defendants are not a very exclusive club. Start talking to a lawyer now, show them the contracts your wife signed, let them know about this website and pray the lawyer is competent enough to block Liberty. As @Franchizee pointed out, the 4th circuit of the Eastern District court of VA, has probably received their ‘Cash in a Flash’ for this year and I would venture to say it is quite larger than $50.
Its a good thing IRS is being more thorough with fraud checks, its definitely necessary, but that will kill the early season! Based on what I am hearing so far, numbers are way down.
@Franchizee:
Yes, I implored her to stick with the one store. But like I said, she was making money and got greedy…bought into John’s pipe dream big time. And she’s not necessarily making money at this point — I think she’s more in the hole than she’s letting on, since she has to get the working capital loans every year.
I remember doing the IOT or AOT this year and some gal named Nicole was on for about 4 hours one day stating the only way to have this business succeed it is necessary to have loans every year to keep going. First start out with Liberty and once you are successful, then you need to get loans every year from a financial instutition Now, when starting with Liberty, they wouldn’t give you a loan to save your soul, now we need money just to have payroll and keep people afloat. Well in my limited experience, this is not a business but a scam. Well if this is such a great deal, why do you need to borrow money every year to just to operate?
@ disgruntled Spouse- I am still researching, but the top guns all in debt to their eyeballs, but I could be wrong, but they are muppet puppet’s for the Liberty system.
I hope she will see the light soon and get everything paid off, but it seems some people are driven by limelight and rubbing shoulder’s with the top brass. For me, YAWN.
@scammed – It is could also be the 50/50 deal…. he he