Illinois Attorney General Lisa Madigan sued Mo’ Money for overcharging customers $800,000 at its East St. Louis and Chicago locations. Madigan claims that the company submitted false tax returns without its customers’ consent. Additionally, customers were hit with hidden fees for services.
In some cases, customers were charged up to $700 in fees for tax preparation and refund anticipation services. Madigan released the following statement during her press release:
“Without customers’ permission, this company filed annual tax returns riddled with errors and charged taxpayers exorbitant, undisclosed fees, but worst of all, it failed to provide consumers with their refund checks.”
As is typically done by predatory tax preparation firms, Mo’ Money directly targets the uneducated working poor that will pay almost any price in order to gain access to their tax refund as quickly as possible. Indeed, consider preliminary results from our latest poll “Do you plan on obtaining a holiday tax loan?” An average of 79% responded “yes, I need money for gifts no matter what the cost.” Only 19% stated “maybe, it depends on the cost.” A staggering 2% responded “no, those loans are too expensive.” The poll targeted those who were seeking holiday tax loans.
The lawsuit was the result of an investigation into Mo’ Money’s practices. Madigan’s office initiated an investigation after receiving 76 complaints against the company just this year.
The high hidden fees are just one aspect that the attorney general was targeting. Her office took an extreme step by advising customers of Mo’ Money to not cash or deposit their tax refund check until they had contact the Internal Revenue Service first.
If you received a tax refund through Mo’ Money, you should consider getting a review of your income tax return. Tax filers who receive an inflated tax return will be on the hook for repayment of their ill-gotten gains, regardless of whose fault the fraudulent return was. Still, IRS will work with those who filed their return in good faith but were defrauded by Mo’ Money or other predatory tax preparation firms.
You may contact Madigan’s office at 800-386-5438 (Chicago), 800-243-0618 (Springfield), or 800-243-0607 (Carbondale). You may contact the IRS at 800-829-1040 or the Illinois Department of Revenue at 800-732-8866.
If you were notified that you are being audited and believe that you were a victim of fraudulent tax preparation services, you may wish to contact one of these organizations who may be able to provide free legal representation (rather than paying thousands for a tax law firm):
- Center for Economic Progress: 312-252-0280
- Administer Justice: 877-778-6006
- Loyola University School of Law, Federal Tax Clinic: 312-915-7176
- Prarie State Legal Services: 800-690-2130
If you already cashed your refund check from Mo’ Money, you might want to set that money aside so that you do not spend it. It is easier to send back savings before you spend it!
Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.
Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.
In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.
Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!
"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."