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LIBERTY TAX SERVICE Franchise Complaints

UnhappyFranchisee.com asked: Are LIBERTY TAX SERVICE Franchise Owners Happy? If you’re familiarliberty_logo 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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5,730 thoughts on “LIBERTY TAX SERVICE Franchise Complaints

  • guest2

    T. EA : I agree trend is bad. Its scary that you can’t really second guess it. This year It could be the 1095’s. Maybe the non-filers owe because of bad insurance advice. Can’t know for sure until they show themselves asking for help or self prepare.

  • mike

    Thanks, T. EA for the info. Seems that people are not in a hurry to file and that this tax season clients coming in about a week later than they normaly file.

  • Franchizee

    That’s what I have noticed in my business. It was pretty busy for the first 2 weeks and last week died down. Yesterday, my regulars are just starting to drop off their returns. Most people were waiting for documents which seem a little later than usual. 1095’s are slowing up many people.

    My people with stock accounts have not come by because they are awaiting their forms from the brokerage houses. Charles Schwab sent us an email and they will be in late February.

    My income has increased and number of returns, but it will be interesting how the rest of this month pans out.

  • IRS stats show the average refund per return is around the same as last year but the percentage of returns that received a refund fell from 71.4% last year to 64.95% this year. That’s almost a 6.5 decline. Wonder why the decline, could it be the premium for the affordable care act and a decline in the number of fraudulent returns. More due diligence by software providers and tax prep companies with the exception of Liberty.

  • It will be better fraud controls and delayed processing mostly. Doubt seizures are included.

  • I read section 201 and if its effectively applied will significantly reduce fraud. People will adjust to the delays and peak will just start later. However, it will have a significant impact on tax preps. who operate like the ones in Baltimore who were barred from electronically filing state tax returns.

  • SaraEA

    I would like to think that the drop in returns filed so far has to do with the IRS having more and better filters to detect fraudulent returns. The thieves file as early as possible so they can get their fake returns in before the real taxpayer does, so I’m sure last year’s numbers include a huge number of fake returns. It is not clear from the tables if the returns the IRS received and then put aside to verify are included in the return count or not. Maybe a significant number of the ID thieves heard about all the efforts to detect them and found a new line of work?

    Just to clarify, the IRS was not hacked. In Feb they had a hardware failure and were off-line for almost two days. The media have described last summer’s attacks on the “get transcript” system (which has now been shut down) and last month’s attack on the system that issues efile PINs (for taxpayers who don’t have last year’s PIN or AGI) as hacks, but they were not. In both cases, identity thieves had enough info about taxpayers (birthdate, Soc Sec, pet’s name, mortgage etc) to enter the IRS sites pretending they were the real taxpayer. They likely got all that personal info from big breaches like Anthem and OPM, then pulled credit reports and trolled social media where people share all kinds of things they shouldn’t.

    For 2017 the big change is that refunds with EITC will not be issued until after Feb 15. Wonder if the banks will want to make loans until then. If you have a large EITC business, you should warn your clients now so they will be prepared.

  • guest

    Good one. No warnings for franchisees about the Feb.15th for 2017. Excellent move by the IRS. Should stop filings with a last check stub, which will shut down lots of tax preps. It they stick to it, a lot of stores will close unless they can get loans.

  • Sad but true

    Giving away cash from the US Treasury, through tax filing should stop. We are borrowing money to give it away. This creates an environment for fraud.

  • Franchizee

    I have four taxpayers that the EIC would effect them in regards to later deposit. They said okay, and I have noted that in their file.

    I bet LTS franchisees don’t have any idea this is coming down the turnpike. But I am sure they got a little taste of the bitter pill this year.

    I am trying to figure out how most will stay in business and not just LTS, H & R Block and JH. They all grew greatly since EIC and Child Tax Credit became a lot larger since 2003. I bet there will be a large number shutting down after next tax season. Only getting payments for 2 months to cover for 12 months.

    Can’t keep loaning people money, some day the money tree will dry up.

  • Up Hill Battle

    Franchizee,

    H & R Block has the resources to survive. Their training is decent and they have a presence in upper middle class neighborhoods. Four years ago Block decided to stop playing the freebie game, free services. Block learned the the freebie promotions were costing too much money.

    Block might have to right size, but Block will survive.

    The new rules are just the tip of the iceberg. If the new budget is approved by the Congress, then the Treasury will have complete authority over tax preparers.

    Also, many states are working on their own regulations.

    All of these changes are going to reward the people who have credentials to prepare taxes (e.g. Enrolled Agents–will be exempt from the regulations).

    I will be collecting the payment upfront.

  • T.EA

    Up Hill Battle: “The new rules are just the tip of the iceberg. If the new budget is approved by the Congress, then the Treasury will have complete authority over tax preparers.” Can you point me towards references this is new to me but not surprised?

  • Guest

    Nothing to be afraid of for well trained preparers. Fewer offices anyway after this season I bet. Due to more people trying to save some of their investment by selling offices. Look at how many tax practices not sold on biz by,etc. The best offices will survive.

  • Up Hill Battle

    T.EA,

    I will point to the reference shortly; this has been an ongoing battle. There are a few bills pending approval. Those bills will give the IRS authority over tax preparers. But if the budget is approved without modifications, then the Treasury will have complete authority. That would make the pending bills redundant.

  • SanFranDan

    ^^^Awesome. It’s about time! :) The Dept. of Justice falls under the law enforcement agencies too. I already know they are vigorously cracking down. The franchisees will get ‘screwed’ by Hewitt himself, but in the long run this is what should have happened years ago.

    Anyone wishing to purchase a Tax Franchise, especially a Liberty Tax one, don’t bother. You will lose it all, and then some. :(

  • Franchizee

    Giving H & R Block a blanket sweep of all goodness is just foolish. H & R Block has one of the largest offices direct in EIC, Child Tax Credit Fraud area in my state. They have so much business, they set another office across the way.

    If the above comes in 2017, what will happen, is H&R will have to lower the number of offices just like everyone else. H & R started the whole problem with there Christmas money. Loans until they get their taxes back 30 years ago.

    Without the EIC payout, many offices will be closed. H & R still makes their money on EIC payout just like LTS and JH.

    So the bottom line, it is great for all the good offices and we will have more stable people because of the office closures. EIC have kept offices going for many years and that is going to dry up.

    It has been IRS and Congress fault we are in this situation. It was an opportunity that has been exploited at the expense of the taxpayer.

  • guest

    Franchizee – speak it. Exactly. Many will survive because they are profitable, but will quit because it’s not enough for the headache and always looking over your shoulders. Can’t find preparers with the discipline to grow, etc. I say a couple more years before big changes in how many left.

  • Sad but true

    I agree it might not be worth it. I have had some of my new clients state that they have never been asked so many questions by their previous preparers. They also act like I am from Mars when I ask for supporting documentation. I can understand that some people will be unethical when filing their taxes. No client is worth the fines proposed. Cost to have your taxes done will go up to cover the lack of preparers. Supply and demand still rules the marketplace. Maybe the IRS is finally waking up and will be punishing more and more preparers to discourage the industry as a whole from commiting fraud.

  • SaraEA

    People who qualify for EITC still have to file tax returns. EITC rules are really complicated, and the majority of those who claim it use professional tax preparers. I don’t think that’s going to change. Next year they will just have to wait a bit longer for their money.

    Time was when people filed their tax returns and waited for their refunds. With the advent of refund anticipation loans, people flocked to HRB where they could get the funds with a couple of days (and eventually a couple of hours). The enormous business they were doing encouraged competitors, Liberty among them. I think the whole thing hurt Block, which once had the reputation as “America’s tax preparer,” there for everyone who needed to file a return whether complex or simple. The focus on fast refunds not only enticed a lower-income, simple return group but scared the middle- and higher-income taxpayers away. (Just like I would never go to an auto dealer who advertises “Poor credit? No credit? No problem!) As Block shifted away from its roots to attract the EITC recipients, competitors sprung up and turned the whole tax prep business into a quick refund model.

    But RALs went away, and now quick EITC refunds will go away. All the chains will still have EITC clients because they are getting big sums of money and have to file to claim it. These people think CPAs and EAs will charge them too much so will continue to be chain customers. Why does everyone think it’s all doom and gloom?

  • Up Hill Battle

    SaraEA,

    I see this as a golden opportunity for the people who are competent and credentialed. The barriers to entry will increase because of the new licensing and training requirements.

    Block owns the market and will survive. But you will not be able to hire competent preparers for minimum wage.

    Also, the criminal penalties will curtail some of the fraud.

    Currently, you set up shop in a low income or even middle income neighborhood, the you will have an enormous challenge of competing with all the fraud.

    The demand for qualified preparers will increase. Prices are going to go up. One positive aspect of all of this is that a credentialed tax preparer will be able to make a decent living without dealing with the problem customers.

  • Sad but true

    I don’t think it is gloom and doom. It actually gives legitimate preparers an advantage. It is frustrating to deal with clients that expect you to try to get away with “what won’t raise any red flags”. My response is; the truth.

    Anyway, I find it interesting that the Liberty Tax Unhappy Franchisee site has turned into a forum on tax issues of the day. Liberty Tax will die as a result of the regulations, if they become the law. Good, honest preparers will not come cheap. Prep fees will rise, pushing more to just do their own returns. Without all of this in place, paid return counts are already falling.

  • Franchizee

    Does anyone know if people in LTS received the AFSP certification this year? I received mine for the last two years. If they did not receive the certification, how are they going to represent their clients in front of the IRS or does LTS have a blanket coverage for that representation?

    I think all these changes will shave down the EIC offices and open opportunity for people who do taxes for accuracy and are serious about tax law and keeping people compliant.

  • Anon

    I wasn’t able to listen to Liberty’s call today at Noon where they reported on first peak performance and status of industry. Anyone else hear and have the scoop? If he says they are up, it will blow my mind, as the IRS is down, and paid prep is down 10%, and most of the Zees I know are down. I’ll be watching for the replay to pop up to listen to I guess. John can spin like a top though, so I’m sure he put a positive angle on things. The other day he said the decline to date for IRS was due to restaurant employees being confused about their insurance. Most restaurants never had insurance for their employees anyway, so I almost spit out my drink that he’d say something so utterly stupid. He said once those people start filing there would be a delayed peak. Yep, sure, that’s it!

  • Anon keep us posted about the call. It would be a half truth at best but still interested to know.

  • I’m shocked. John always spins something bad into something potentially good. Yet he said nothing, almost literally said nothing positive. Really, he didn’t report Liberty’s results, only the IRS stats as of last week. Paid prep down 7%, self prep up 3%. Says that some franchisees say this is a sign of a culture shift in the industry, but it’s not according to him. It’s just due to frustrated restaurant employees (who don’t get healthcare anyway and never have by the way) now losing their insurance and ostriching instead of filing. Like they don’t want their EIC John, that $300 penalty isn’t stopping them from getting the $7000 refund filed ASAP. He almost literally said nothing else of note. If the numbers were up, he damn sure would have at least mentioned it, even if not with specific % or return count or $$. He would have said we were outperforming the industry or HRB or something. My guess is we are more than the 7% down the paid prep as a whole is. We shall see once Liberty reports for the Quarter.

    He didn’t talk about the impact of all the FREE/FREE/FREE online filing that is being bombarded around everywhere, nor mention that HRB ate our lunches with the $1,000,000/day give away and with all their ads and we gave away $1k/day with no advertising. Didn’t mention that our “competitive advantage” this year, the $750 loan was available to most every Mom-n-Pop too, and actually cost them less. Definitely wasn’t exclusive or an advantage.

    Nothing to combat self prep, nothing to combat our competition, nothing to combat fraudulent self filers, nothing to combat our own fraudulent zees and preparers (think these scandals aren’t contributing some to the decline in numbers? I have a bridge to sell you). I’m so disappointed in John, in corporate, in general. I will still make money, despite them, not because of them, but it has been declining, and will continue to decline. Trying to sell to get out of this when the values are falling like a rock is almost impossible as well. Just sad all around.

  • Anon thanks for the info. Even Forbes has picked up on LTS issues. Taxes aren’t going anywhere anytime soon but it’s going to be a tuff transition lots won’t make it. However this ends up medium to high skilled independents will do just fine and HRB will probably be the only retail brand to survive. My 2 cents.

    http://www.forbes.com/sites/kellyphillipserb/2016/02/19/tax-return-preparer-fraud-raises-concern-at-liberty-tax-other-preparer-sites/?utm_campaign=yahootix&partner=yahootix#28409d32672e

  • SanFranDan

    Anon:

    I feel bad for you if you are a current zee. I do not feel bad for JTH at all, in fact I hope he burns to the ground. Your last paragraph is very telling. JTH himself is behind much of the fraud you see happening at different territories. Trust me, I’m not lying on this one.

    What skilled preparer in their right mind would work only for @ 12 weeks a year? It’s about time that the preparers are scrutinized big time and that they have all kinds of rules & regulations to now follow. Had this happened years ago, there wouldn’t be the EITC fraud that they are finally trying to halt. It’s been happening for years. What they need to do is to trace JTH’s involvement with HRB, then JH, then LTS to see the patterns.

    When I first began several years ago, JTH was pushing the free returns. What a crock. It helped HIS numbers, not yours. The fraud is rampant. It’s about time they’re finally putting the pieces together. Don’t forget when JTH was de-frauding the gov’t and teaching others how to do so, it was before the internet, and certainly before sites like this one. Now that we finally have a forum to vent (thanks, ADMIN!!!), finally the LTS numbers are going down.

    My advice? Jump ship while you can, with as much $$ saved as you can. It sounds like it’ll get much worse before it gets better. Thank goodness it’s finally starting to happen. Really so sorry to the current zees, however.

  • I’ve been thinking, and I think the chink in the armor has appeared in JTH’s underbelly. I honestly think a case could be made by current Zees against corporate that claims due to their lack of institutional control, that Zees have been harmed financially. That Liberty failed to protect it’s brand, and monitor it, and Zees have suffered financial harm due to the negligence. Might be enough to get people out of the their contracts at least. Maybe even get their investments back. I can’t see how they could legally argue that they haven’t lost institutional control to be honest with you. Neglect is almost as bad as intentionally taking the fraudulent action. They should be held accountable. Zees just need to stand up.

  • SanFranDan

    ^^How about if JTH sold franchise territories to people that were actually qualified to run one, to begin with? How about the books you have to buy for classes in November and then hire the people off the street with one week of schooling? Gimme a break. It’s 10000% his fault and the way the franchise was set up (deliberately). You buy e-v-e-r-y-t-h-i-n-g extra. Many things marked up several thousand percent.

    I know back many years ago, there were many areas of the contract that stipulated NO class action lawsuits. Ah, gee whiz, but why not?! They certainly deserve everything bad coming to them.

    The best thing that’s happening now is that reputable media outlets like Forbes are coming forward. Now we need to alert all media outlets and have them do thorough investigations. Amazing what they’ll find. Hopefully they won’t take as long as the DOJ is taking.

    Unfortunately LTS is prepared for this and their largest home office dept. are the Lawyers. They will absolutely twist it so that it’s the zee’s fault, not theirs. Don’t forget, he’s perfected all the come back answers after 40+ years ripping people off.

  • bill

    Anon: I’m not a lawyer and I know these franchisee agreements are one sided but there still contracts and there still has to be performance standards met by the franchisor. If you hang in there you could prevail. It might be self-serving to contact the IRS and help them in their investigation.

  • Sad but true

    The fallout from the failure that is Liberty Tax will be an interesting one to observe. I am certain of one thing and I and others have been saying it for awhile; Liberty Tax, as we know it today, will fail as a going concern.

    The wheels are loose and the company is about to crash and burn. I hope the current zees can maintain what they worked so hard to have so far. We all know that it is the zee that does 95% or more of the work to make their tax businesses a success.

  • ADMIN

    Sorry if anyone had trouble accessing the site for a while today.

    We had a technical issue and had to reset some things.

    If anyone had a comment that didn’t appear or disappeared, please repost or email ADMIN at UnhappyFranchisee[at]gmail.com.

    FYI Kelly Erb of Forbes (and the TaxGirl blog) is a good friend of our site and reads your comments whenever researching Liberty Tax franchise issues.

  • SanFranDan

    Welcome to our little group, Kelly. There is a need for a good investigative reporter at this point. There is SO much negative to tell………it’s amazing HE has lasted as long as he has. Probably paying everyone off. All I can hope for is that justice will prevail (someday soon) and HE ends up in jail as he should.

  • Concerned Zee

    Look for lots of Liberty Zees to consolidate or close completely after tax season. With all the various issues paid tax prep presents who wants to take out mountains of debt in hopes for a 3 month payday? Turbo Tax, IRS increased EiC Audits, ACA, minimum royalties, year round rent, etc. At some point the gravy train will stop and wise franchisees will look to quit the business or exit Liberty so they can save 19% royalties and marketing fees. Early season tax filing is definitely a dying part of paid tax prep.

  • Sad but true

    Once upon a time John Hewitt and tax industry analysts touted that the ACA would be a boon to the paid tax prep industry. Well, what went wrong? As of 2/12/16, paid returns are down over 7%. Self-prepared returns are up over 2%.

    The tax guru missed this one. One positive for Liberty is that their market share is so small that their amount of returns lost (possibly lower this year) could be minimal.

    They still won’t catch Block by 2020. Is that even one of their looney tunes statements anymore?

  • T.EA

    Look at the stock price I bet there is enough bad news even the money managers are saying where there is smoke there is fire. What happens to the company in the next 6-12 months will be interesting.

  • When I first started posting here with other franchisee it was with the intent to warn other potential franchisees about the problems with this company. I felt that most people like myself who were looking at this company would be blinded by the hype and just didn’t have enough good information to make an informed decision. Initially I still believed in the concept of franchising but after reading the post on this and other sites I realize franchising is just a business model/gimmick, like rent a centers, and sub prime mortgages, to take advantage of people.

    I often wondered why Sun Trust would continue to lend Liberty Tax millions on a credit line when it was clear from their cash flow statement that the whole purpose of the credit line was to be able to prop up failing franchisees. But the bank understood that the more successful the company looked the more potential the company had to sell new territories. They choose to ignore that this need for financing showed that franchisees weren’t successful. Of course in the banks mind if the franchise failed the company could just resell the territory.

    Wall Street had a similar process. How else can you explain why they ignored the numbers, or the poor management decisions to purchase i.e. E-Smart, or the lawsuits along with the comments from this site. Of course the other reason they continued to invest and drive the stock up to over $30.00 a share is the market is a form of gambling and they were playing with someone else’s money.

    Buyer Beware of Liberty, Sun Trust and Wall Street!!!

  • Chuck HInes

    This is my first post.

    I was with Liberty Tax from May 2012 until I was terminated in June 2015. I am currently enmeshed in a suit with Liberty Tax; and I have lost so much money as a Liberty Franchisee, $250,000, over three years, two tax offices, and three Walmart kiosks, that I have to go it alone, Pro Se, as I do not have the ability to even pay for a Lawyer. [Those who want to communicate with chuck should email me in confidence]

    I’m looking for any help anyone out there can offer. I am trying to put together a Class Action suit; but I’m short on legal know how. I need one hell of a lot of help to put that together. Any ideas? I’m looking at a 3/15 date to file. I’m from Baltimore, 74 years worth. My number is [redacted]; and I have an office number of [redacted]. Call.

    And if any of you are adept in the modern world – as I’m not – please get this to the Forbes Girl. Actually, I wish she and I could talk, as I’ve got all kinds of stories; and with the way some of you are talking here, has anyone considered the RICO ACT? You all seem to be “knowledgeable”. Someone pick up the phone. I’m Eastern Time Zone, and work 7a till 11p If you’re in California, don’t call me after your 8p!

    Chuck Hines

    CHUCK:

    We don’t allow personal contact info in the comments section. To coordinate communication with other readers, please contact me at unhappyfranchisee[at]gmail.com.

    Also, I am friends with Forbes Tax Girl Kelly Erb. If you would like to share your contact info and story with her, provide it to me by email.

    Thanks,

    ADMIN

  • mike

    Wow, Chuck….I hate to say welcome to the board, because that means that SCREWITT has gotten to you. Let me guess, “you didn’t follow the system.” Perhaps that was what you were told. The best way to stop SCREWITT is to tell your story to the world so nobody else will be harmed and thus franchise sales will be ended and they will go out of business!!! Others on this site may have some different solutions.

  • guest

    Why did they terminate you? Can you share some of what happened?

  • Screwed By Corporate

    Chuck, you are in Maryland? There are a bunch of franchisees in Maryland getting ready to sue corporate about this suspension. Corporate has blocked franchisees from submitting any schedule C returns, which is a breach of their franchise agreement. Also, corporate failed to protect the brand by not training it’s franchisees to file returns property in accordance with state rules. I would contact your former zees and join their suit. Just email them and they will certainly be happy to add you to the lawsuit. It is about to get ugly there, as corporate has failed to update zees on what is going on and most zees are down 30% to 40% this year because of this mess that they have caused. All they have done is hire a lawyer to protect themselves.

  • SanFranDan

    ^^^Screwed By Corporate:

    I want to comment on your sentence: “Corporate failed to protect the brand by not training it’s franchisees to file returns properly in accordance with state rules”. That is an obvious given, but then they went one step further……

    It is a FACT that not only did corporate NOT train franchisees properly, BUT THEY (LIBERTY) were the ones to instigate HOW returns should be filled out, ESPECIALLY SCHEDULE C) (Do I hear against the Law???)

    It’s going to explode before it settles down. And when the dust settles, Liberty and certainly their top team should be out of business and in the hands of the DOJ and IRS. trying to explain. “”Well, uh, you see it’s like this.”” Bull—-.

  • Guest

    Franchisees deserve to know what is going on in Maryland. They are planting fear on schedule c. Not all schedule c is fake filng. Franchisees just filing around it with Taxact or turbotax.

  • Sad but true

    We have said this before and I say it again; if you ignore the advice on this site about the pitfalls of investing in a Liberty Tax Franchise, you can only blame yourselves for failing. You have been warned about how difficult it is to be successful as a franchisee with Liberty Tax.

    You have market trends going against you, with stiff competition to boot. What I mean by market trends is that paid returns are falling and self-prepared returns are rising. I understand that this could all change by the end of the tax season but I doubt it. You also have a business structure with Liberty (19% fees) that leaves little profit for you as the franchisee.

    If you don’t believe me or us? Well, you would have to be crazy to ignore over 4700 postings with most of them being negative comments on the failures of this brand.

  • If what guest and screwed by corporate are saying is correct. Liberty is clearly insulating itself and will lay the blame of this mess on the franchisees and the area developers of Maryland.

    What it also shows is that the company doesn’t have any controls in place to monitor its franchisees when it comes to abusive tax filings. If they did they wouldn’t have to punish all the franchisees of Maryland, simple bar the ones that the state has already barred from electronic filing.

    Of course Liberty knows how its successful franchises work. As guest pointed out “Franchisees just filing around it with tax act or TurboTax”.

  • See there are two things in play here. First, I 100% blame the franchisees in Baltimore and SC (and Detroit, etc). Listen, fraud is fraud is fraud. It gives the rest of us that do returns the right way, and continue to lose business because we won’t cheat like the rest of these dopes, a bad name. John did not make these idiots file with paystubs and false Sch C income and make up kids. I don’t pity these people at all. Hell, instead of blocking efiling, they should have been banned from filing period.

    Now, that said, the other side is Liberty corporate’s lack of institutional control. They don’t promote fraud at the corporate level, as some are saying. I’ve never saw that in all my years in here. However, there are AD’s and higher up Zees that do things the incorrect way and have been idolized. This has made it appear that it’s OK to do things this way. Liberty has to have known about all this fraud. Come on, if my office has done 10 returns by early-January due to no actual physical W2’s being out yet, but some of the “Top Guns” have done darn near 600, you tell me what’s up? Doesn’t take a rocket scientist here. There should be live, on the spot audits of offices that are outliers, BEFORE they have a chance to retroactively update their files with W2’s and such later. There has to be a filter to tell you if this one office has for instance, McDonald’s W2s, yet no other offices around have filed any, that might just be a flag. Yet there are no live audits. There is no teeth to the supposed compliance division. They may send out a warning that they need to send in W2’s for a small number of these. Guess what those fraudulent offices do? They make up W2’s! If you have all kinds of EIC returns with only Sch C cash businesses filing in early January, it might be a flag. Corporate should have known better and sniffed these guys out long ago. That I 100% blame them for.

    The combination of the fraud by the Zees and the lack of control by corporate has dramatically impacted the brand. They report numbers this week. I bet it’s not going to be pretty. Now I just wish I knew how I could exit without losing everything I’ve worked for, but their agreement is so anti-franchisee that there is no way out without basically giving it all to them, unless you can find someone to buy. In this environment corporate has killed any value a territory may have. Not a good situation to be in.

  • People are not reading the paper or the mags. If its not on tv, they dont know it happened. Then soon forget. Big impact mostly in maryland. New problem is back to turbo tax. I had five people today talking bout scanning the documents with the phone.
    Big problem if refunds dont start until february in 2017. You can sell but low price. But they will have to plug the fraud. Late payment of refunds will end the paystub stuff. Will also cut fees. Thats the fear.

  • SanFranDan

    “They don’t promote fraud at the corporate level, as some are saying. I’ve never saw that in all my years in here.”

    Just because YOU haven’t seen it, doesn’t mean it never existed. I’m talking years ago it was extremely prevalent. What corporate does now I have no idea. I’m sure they cleaned up their act because they have been found out. Don’t forget, years ago there was no internet or sites like this one. Now, people here post THE TRUTH with nothing to gain except helping potential franchisees stay away and making sure corporate pays for their fraud. By fudging schedule C’s, it not only helped the customer and the franchisee, but corporate too, in a big way, by increased fees and they got 19% of those higher fees. That was “unofficial verbal training” after regular training in Virginia Beach let out for the day.

    So please don’t say they never promote fraud unless you know for sure. This is something I witnessed first hand over & over again. And that’s just the tip of the iceberg.

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