DC attorney general sues Liberty Tax claiming it misled thousands of customers
WASHINGTON – DC Attorney General Karl Racine warns Liberty Tax after filing lawsuit against the company, claiming it misled and secretly increased the cost of preparing tax returns for thousands of taxpayers from DC.
Liberty Tax is the 3rd largest tax filer in the country – with multiple offices in the district.
“This is a massive company that has engaged in blatant fraud,” Racine says.
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The Attorney General is seeking justice for over 1,000 DC residents who were simply trying to do the right thing, file their taxes.
According to Racine, “Liberty Tax has repeatedly offered filers $50 cash in their ads showing large greenbacks.
He believes the tax society has targeted some of the city’s most vulnerable residents with the free $50 promotion.
“Liberty Tax has created a shop to take advantage of people who work very hard for every dollar they earn and have no money to waste and yet only to be robbed of them,” adds Racine.
In a map shared with us by the AG’s office, you can see that the four Liberty Tax locations in DC are located in some of the district’s lowest-income neighborhoods. Locations are 3127 MLK Jr. Ave, SE. (Ward 8), 1629 Benning Rd NE (Ward 7); 3905 Benning Rd. NE (Ward 7); and 1002 H Street NE (Ward 6).
“They handed $50 to the individuals, and they took advantage of them financially and they charged them money that they didn’t have to charge them to make up for the $50 they gave and more,” Racine said.
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This meant that many residents ended up paying more to file their taxes.
Racine says “our investigation reveals that Liberty Tax charged recipients $50 more for services than people who did not take advantage of the fraudulent trick.
This trick was reported to the AG’s office after a woman filing her taxes got chased. She contacted the local legal aid organization, Tzedek DC, and they notified Racine’s office.
In a statement from the director of Tzedek DC, their director Ariel Levinson-Waldman states:
“The Liberty Tax misled DC resident consumers, led them through a maze of fine print, and pressured them into unfair contracts. We are grateful to Attorney General Racine and the DC OAG for holding Liberty Tax accountable for targeting the low-income DC residents. This issue is something we have seen firsthand from members of the community we serve, particularly in Ward 7, and it is a practice that needs to be reformed. DC Residents must know that they are not being deceived when filing their taxes are committed to helping residents exercise all of their rights under the law so that they are not deceived or abused by unscrupulous business practices. case is also a great example of how, when residents raise their hands and help report an issue, service providers in Tzedek DC and sister agencies around DC can work work with the OAG to ensure justice is served.”
Racine doesn’t believe this is only happening in DC
“Across the country, we’re getting calls from other jurisdictions who are concerned that the liberty tax is doing the same thing to DC residents,” he adds.
The AG’s office uses this unfortunate event to inform the public of its free tax services.
“We also want to inform DC filers of many resources that provide free tax assistance – with volunteers trained and certified by the Internal Revenue Service. These free resources help low-income residents, seniors, people with disabilities and mobility-impaired English proficiency to prepare their taxes each year,” Racine said.
FOX 5 has contacted Liberty Tax for comment, and we are awaiting a response.
To report unfair business practices in the District, you are encouraged to contact the OAG’s Consumer Protection Office at 202-442-9828.