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Investigation Reveals that 30% of Tax Preparers in NYC Lied About Rapid Refunds

For whatever reason, people crave their tax refunds like Big 4 recruits crave tchothkes. Accordingly, someone came up with the bright idea of “refund anticipation loans” or rapid refunds. Web CPA is reporting that the New York City’s Department of Consumer Affairs has investigated nearly 800 tax preparers throughout the City and issue over 2,000 citations for violations including illegal advertising of the rapid refunds.


Getting your refund ASAP is the personal mission of every tax-American but if preparers lie about the fact that they’re actually loan sharks, then that’s when the City will get after you:

Consumer Affairs Commissioner Jonathan Mintz noted that RAL costs can amount to as much as a 500 percent interest rate. “The truth is that RALs are such a bad idea that tax preparers and lenders generally need to lie about them in order to sell them,” he said at a press conference Tuesday. “Lying about them in New York is illegal.”

Mintz’s investigators found that three out of 10 tax preparers in the city were misleading their customers about their rights, and in most cases telling them or deceptively advertising that a refund loan was just a rapid refund or a same-day refund. “In the Bronx, over half the preparers that we inspected got it wrong and were issued violations,” he said.

C’mon Bronx tax prep, you’re better than that…

The silver lining in this little story? The City will collect a $1 million and by the grace of God, tax preparers are actually messing up less, as the compliance rate reached 69% in the 2010 investigation up from 65% in ’09 and 56% in ’08.

We here at GC have harped on the upcoming tax preparer regulation, most recently the declaration by the IRS that the new regs are the most important step taken EVER. While that particular statement remains to be hyperbole of the highest order, the new regs will certainly drive these tax prep/loan sharks underground. Whether that’s good or bad depends on your comfort level with black market tax prep services. The IRS doesn’t care; they’ll be coming heavy either way.

NYC Cracks Down on Income Tax Preparer RALs [Web CPA]

Amsterdam’s Hookers Are Pretty Much Okay with Finally Having to Pay Taxes

Which doesn’t come as much of a surprise since the Dutch aren’t the rabid purtian, anti-tax type that exist in some countries.

“It’s a good thing that they’re doing this,” said Samantha, a statuesque blond Dutchwoman in a white leather dress who offers her services from behind one of the hundreds of red-curtained windows in the heart of the city’s ancient center. “It’s a job like any other and we should pay taxes,” she said.

Plus! Since these audits will be as boring as expected, there may be an opportunity to drum up a little business:

Prostitutes were told they would be audited in typically bureaucratic fashion, with a notice addressed “to landlords and window prostitutes in Amsterdam” published last week in the city’s main newspaper. “Agents of the Tax Service will walk through various elements of your business administration with you, such as prices, staffing, agendas and calendars,” the notice said. “The facts will be used at a later date in reviewing your returns.”

Or as a short, stocky, bald man once said, “I want details and I want them right now!”