Monday, March 25, 2013

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Attorney General Abbott Secures Asset Freeze, Restraining Order against LBS Tax Services

AUSTIN Texas Attorney General Greg Abbott charged Florida-based LBS Tax Services with multiple violations of the Texas Deceptive Trade Practices Act. In response to the State’s enforcement action, a Harris County district court on Friday froze the tax preparation firm’s assets and entered a temporary restraining order against the defendant. The court’s order also set a temporary injunction hearing for April 1 at 1:30 p.m.

According to court documents filed by the State, LBS Tax Services is engaged in widespread tax preparation fraud throughout Harris County and the surrounding area. In affidavits provided to the court, LBS Tax Services customers testified that they hired LBS Tax Services based on the defendant’s representation that its tax preparation fee would be $75. Only later after receiving their tax refund check from the IRS did customers learn that LBS Tax Services charged more than $75, improperly withholding hundreds of dollars from customers’ income tax refunds. LBS Tax Services customers also stated that the tax preparation firm refused to itemize the fees it imposed without their consent and refused to refund the difference. Other affidavits explained that LBS Tax Services’ work product was riddled with errors and inflicted further financial harm on customers by prompting the IRS to notify them that they owe money.

Media links
Temporary restraining order against LBS Tax Services
Attorney General's lawsuit against LBS Tax Services

The State’s enforcement action is seeking restitution for customers of LBS Tax Services who were financially harmed by the defendant’s unlawful conduct. In addition, the State is seeking civil penalties of up to $20,000 for each violation of the Texas Deceptive Trade Practices Act.

To avoid becoming a tax scam victim, the Office of the Attorney General urges Texans to take several steps before hiring a tax return preparation professional:
Ask for the tax preparer’s credentials.
Check with the Better Business Bureau for complaints against the tax preparer.
Verify whether the tax preparer is a certified public accountant.
Read the tax return carefully before signing it. Never sign a form with spaces left blank.
Make sure the business is open year-round in the event clients need to ask follow-up questions about their returns.