Woman Charged Over $700 for Tax Prep

If you pay someone to prepare your taxes, you might want to shop around.

The NBC Connecticut Responds team spoke with a New Britain woman who could have paid anywhere between $100 and just over $700 for services. It all depended on which preparer she hired.

Jeanette Burgos spent a few weeks trying to understand why it cost her $712 to get her taxes done at the Liberty Tax Franchise in New Britain.

Burgos’s aren’t complicated. According to a tax expert, with her income status, she even qualifies to have a preparer file her taxes for free at a community center. But she didn’t know that when she went to Liberty in February, agreed to pay. Then, three hours later, she said she went back.

“In my head I just like, something’s wrong, something’s wrong,” Burgos said.

But it wasn’t wrong. The New Britain Franchise owner told NBC Connecticut Responds his charges reflect corporate guidance and he tells every customer what they’ll pay before they sign the dotted line.

That was echoed by the corporate office. A spokesperson said they have not found an indication of problematic pricing” on Jeanette Burgos’s filing.

So NBC Connecticut looked at how the $712 charge stacked up against competitors.

The company-owned H&R Block in West Hartford said they would have charged her around $360. A Jackson Hewitt Branch, also in West Hartford, would have cost her between $300-$350.

All three of those companies charge by the number of forms. Some preparers, like Torrington-based Kris Roberts, charge by time. Roberts estimated Burgos would have paid between $100-$150 for her service, and she’s not surprised by Burgos’s complaint.

“Which is a scary thing that it doesn't surprise me, because I run into it all the time,” Roberts, who is a chapter president of the National Association of Tax Preparers.

The lack of consistency in pricing between various tax preparers is a three-part issue, according to Roberts. For one, the system is complex for the average person.

“Congress has made the tax code so complicated, that people can't do what we consider simple returns anymore,” Roberts explained.

Consumer education is another problem. Roberts said many customers don’t ask enough detailed questions about pricing.

And finally, oversight, or lack thereof.

“Right now there's absolutely no regulation, no oversight, no standards for what we would call commercial tax preparers in the state of Connecticut,” said Department of Revenue Services Commissioner Kevin Sullivan.

Sullivan hopes a bill proposed this session will help set an industry-wide standard.

“The right of the taxpayer to know at the beginning of that conversation, how long is this going to take, do I have an opportunity to reconsider, how much are you going to charge me, what exactly are you going to charge me for,” Sullivan said.

All three major companies will answer most of those questions up front, and customers do have the option to reconsider. But neither Jackson Hewitt nor H&R Black disclosed what they charge for various forms.

After NBC Connecticut Responds asked the Liberty Tax owner, he did give us a breakdown of Burgos’s nine documents.

Almost half of that $712 fee came from two sheets alone – her 1040-A and her earned income credit. They are both specifically for low-to-moderate income earners.

“Because she qualifies for these earned income credits, it's almost like she's being penalized,” Roberts said.

Burgos said if she hires a preparer for next year’s taxes, she’ll be better prepared.

“It makes me like, I don’t know, like $712 Is a lot of money. It’s crazy,” Burgos said.

An H&R spokesperson said their average cost is less than $220, and all clients may request a fee estimate before deciding if they do want to file. The same applies to Jackson Hewitt, and their prices start at $48 for a federal return.

In the end, the Liberty Tax franchise manager offered to reduce Burgos’s charge to what she paid last year through Turbo Tax - $140.

That brings the NBC Connecticut Responds total to $142,839 dollars recovered for viewers. 

If you have a consumer issue you want investigated, call NBC Connecticut Responds at 844-303-RESP or click here.

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