The New York City Department of Consumer Affairs conducted a two-week-long enforcement sweep of tax preparers across the city and issued violations to one out of every three preparers it inspected, mainly for violating laws governing refund anticipation loans and disclosure of their true qualifications and fees.

Jonathan Mintz

The department conducted close to 850 inspections citywide and issued over 1,000 violations to tax preparers who misrepresented their qualifications, violated consumer rights, or illegally advertised refund anticipation loans as “instant” or “rapid” refunds. Total fines from the enforcement sweep could reach close to $1 million. The agency is encouraging taxpayers to instead take advantage of free or low-cost options for preparing their taxes and claiming the Earned Income Tax Credit.

“There are substantial tax refund dollars waiting for New Yorkers, who have, since 2002, claimed almost $20 billion in Earned Income Tax Credits alone,” said DCA Commissioner Jonathan Mintz in a statement. “That’s why we’re making it as easy as possible for people to file their taxes and claim those refunds.  And since the IRS issues these refunds in such a short amount of time, there’s no reason for such expensive, often deceptively sold loans getting in between you and every dollar of your refund.”

His department inspected income tax preparers charged with previous violations in 2011 and 2010, along with other preparers who are located in neighborhoods with large populations of immigrants and high usage of refund anticipation loans.

The DCA found that 65 percent of businesses that received a violation last year and were inspected this year, were complying with the law. In New York City, tax preparers must post their qualifications, fees and charges, and whether or not they will represent consumers at a government audit. Tax preparers must sign every tax return, and provide their customers with a copy of their tax return and a receipt for their services.

New Yorkers with children who earn less than $50,000 or $18,000 for those who do not have children can visit one of 69 Volunteer Income Tax Assistance sites in the five boroughs where a certified volunteer will prepare their taxes for free, the agency noted. New Yorkers earning less than $57,000 can also file their taxes online for free at nyc.gov/taxprep. The city is also partnering with Intuit and One Economy Corporation to offer access to free online tax preparation software. New Yorkers can also have their tax returns prepared at a participating H&R Block office with a new city-sponsored coupon for $29. To qualify for the H&R Block discount, residents must earn less than $41,000 with children or $31,000 if they have no children.