Action 9 investigates tax preparation chain



ORLANDO, Fla. - Action 9 investigated a large tax-preparation chain that many customers claim hit them with hundreds of dollars in hidden fees.

Ads suggest big refunds and low fees at LBS Tax Services.

"What did I expect to pay? Like $75, like I was told when I first called," said Deborah Madonado.

But Maldonado's charge at LBS totaled more than $800. And she only discovered that when she saw how much money the company took from her refund.

"Did they ever mention these fees while you were there?" asked Action 9's Todd Ulrich.

"Not at all," she said.

Fees that included $75 for each form that was used. Later the company showed her a receipt she signed, but Maldonado claims the total amount had not been filled out.

"Which is absolutely ridiculous," she said. "Who would pay $800 to do their taxes?"

Maldonado's return was prepared at an LBS office in South Orange County. When Action 9 went in to ask questions, they slammed the door on the news crew.

LBS, also known as Loan Buy Sell, has 15 local locations and an F rating at the Better Business Bureau, and most complaints involve excessive and undisclosed fees.

Karin Dennis said she worked at LBS for a month.

"Were you being trained to hide the fees?" asked Ulrich.

"Yes," she said.

Dennis' company script showed a $75 fee, but she claims she was expected to charge at least $600 for simple returns and use seven extra forms to run up the bill.

"They really don't need those extra forms to get their refund," said Dennis.

The issue can lead some customers to face trouble with the IRS.

Action 9 had a local financial planning expert review a return prepared at a local LBS office. He found the preparer claimed college tax credits for children under 12 who could not possibly qualify.

That added another $2,600 refund an IRS audit could uncover.

"The taxpayer is responsible for the taxes and the interest and penalties. And when they try to find the tax preparer, he'll be long gone," said Joseph Bert.

Several customers told Action 9 they've complained to the IRS.

"Just the fact they're doing this to people is sad," said Maldonado.

An LBS spokesman told Action 9 every employee must disclose all fees.

Top managers did not return Action 9's calls.

Several tax experts said these simple returns cost about $100 to $200 to prepare.