Rochester, N.Y. – Angry customers lined up outside a Lake Avenue tax preparation service on Tuesday, complaining about bad checks and delayed checks. It was a scene that has played out at Instant Tax Service offices in several other cities.
Instant Tax Service issued refund loan checks to customers with a bad routing number.
“Basically when I went to cash it they said the numbers didn’t match on the check something like that,” said a woman who left the office with a brand new check.
A manager who wouldn’t give her name, said, “We figured out the problem. We’re here now to make sure everybody gets those checks they printed wrong back and get their right checks. It’s just a numbers error. Could have happened to anybody.”
The manager would not discuss the problem further.
The national office of Instant Tax Service acknowledged the issue in a January 13
press release, saying there “was an attempt to invade their banking institution” and there could be a delay in issuing checks. The extent of the problem is not clear. A call to the national office wasn’t returned.
Delayed ChecksMost customers who showed up to Instant Tax Service’s Lake Ave. office on Tuesday were angry about delayed checks. In addition to the internal problem with the company, the IRS delayed refunds for some early filers.
“I need my check,” said Betty Lou. “I think it’s a mess…I’ve been on the phone with the IRS, just everybody trying to find out what’s going on.”
“We’ve gotten 20 different excuses about where our money is,” said Harold Snyder. “I found out my state has been released. It’s been deposited into an account I did not give authorization to. I’m here to get some answers from them."
“I asked for a copy of my return and they told me I couldn’t get it until the check came. That seemed a little odd to me,” said Wendy Campbell.
“I work hard for my money and people get so upset if they don’t have they money,” said Linda Jackson.
FeesPeople come to Instant Tax Service for the promise of an upfront refund loan of up to $1,000. Customers get frustrated if the company’s bank, unwilling to risk large sums of money, will only issue a check for far smaller amounts. What’s more, customers say Instant Tax Service charges about $600 to file a return and takes it out of the refund check.
Some customers were aware of the fee and others said they were not.
“When I got (the refund), it was shorted over $600,” said Tammy Valentine.
“They charge you $600 for a $100 loan,” said Von Dunbar, who said he came to Instant Tax Service, hoping to qualify for a $1,000 loan. “I think they mislead on the commercial to get you in here and file. And when you come file your taxes I think what they do is they try and keep your money.”
Several tax experts warn against refund loans. They said the IRS will deposit refunds into a checking account within a week to 10 days. They also said preparing taxes for a typical low-income family shouldn’t cost more than $200 to $300.
“If you have a checking account, you can go to any reputable tax preparer, and you can get a refund in about a week,” said Michael Hendrix of A&J Tax, Inc. When told about the bad checks and other concerns expressed by customers he said, “This isn’t normal.”
The Internal Revenue Service said it does not comment on the status of operating businesses. A spokesman for the New York State Department of Taxation and Finance was not immediately aware of the customer complaints.
Instant Tax Service has been the subject of customer complaints in other communities, including Gaston County, North Carolina, where
police were called to an Instant Tax Service office to control an angry crowd.
