Customers under IRS audit after local company prepared their tax returns

Clients promised ‘maximum’ tax refunds must now give money back to government

SANFORD, Fla. – A tax preparation company that promises to get customers the “maximum refund” is the target of multiple complaints alleging employees entered erroneous financial information on clients' federal income tax returns.

Several customers of Neighborhood Advance Tax have been audited by the Internal Revenue Service in recent months and must now pay back thousands of dollars in undeserved tax refunds, News 6 has learned.

“(The company) needs to answer for this,” said Anita McKim, who paid Neighborhood Advance Tax more than $1,000 in fees to prepare her 2019 tax return. “They need to give me my money back.”

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The owner of Neighborhood Advance Tax, Franklin Carter Jr., said he was unaware of the customer complaints and said he did not realize most of the phone lines at his company’s nine Central Florida locations had been disconnected, making it nearly impossible for clients to get assistance after they were audited.

“This is news to me,” said Carter, who indicated his management team should have been answering customers' calls even though the offices temporarily close at the end of each tax season. “That’s unacceptable.”

Days after News 6 contacted Carter about the customer complaints, Neighborhood Advance Tax set up a new customer service telephone number at 877-746-6104 and apologized to former clients for any inconvenience.

Erroneous tax filing prompts IRS audit

McKim said she did not feel skilled enough to file her 2019 income tax returns on her own, so in February she visited a Neighborhood Advance Tax office located in a Sanford strip mall.

“I’m not very tax literate,” she said.

According to McKim, an employee spent about a half hour entering her income and other financial information into a computer.

“I asked him, ‘How is it possible that you’re getting people back a lot of money?’, and he said, ‘We get you the most exemptions and deductions possible,'” McKim said.

Although the tax preparer later provided McKim with a copy of her Form 1040 tax return when she left, McKim said she did not immediately notice that the return claimed an excessive amount of deductions that helped lower her tax bill.

Also, McKim said the company failed to provide her with a copy of her “Schedule A” tax form, which would have more specifically detailed the particular tax deductions she was claiming.

It was not until McKim received a letter from the IRS six months later that she said she discovered her tax return contained inaccurate information that was uncovered during an audit.

“It’s really unfair. When I got this (IRS letter), honestly, I was in tears,” McKim said.

McKim’s income in 2019 was a little more than $33,000, records show, yet her original tax return indicated that she was claiming nearly $33,000 in itemized tax deductions.

“I barely even make that amount. There’s something not right there,” McKim said.

According to the IRS, McKim’s tax return improperly attempted to claim tax deductions for nearly $9,900 in gasoline expenses and $9,900 in miscellaneous expenses.

“I told (the tax preparer) I don’t have any deductions,” McKim insisted.

The IRS also said McKim’s return had improperly claimed $9,857 in tax-deductible charitable contributions, an extremely generous gift that would have equaled more than a quarter of her income.

“(I made) no charity contributions,” McKim said. “I don’t make enough. I make enough to pay my bills.”

Neighborhood Advance Tax originally told McKim she was entitled to a $2,456 tax refund, records show.

But by the time McKim repaid the IRS much of the tax refund that was improperly issued to her, McKim’s refund totaled just $166.

Despite the errors on McKim’s tax return, records show Neighborhood Advance Tax charged her $1,058 in tax preparation fees.

Instead of requiring McKim to pay those costs out-of-pocket, she said Neighborhood Advance Tax collected her original tax refund directly from the IRS, deducted its fees and then deposited the balance of the refund to her bank account.

McKim noted that the company would not have been able to collect the full $1,058 fee under that arrangement had her tax return accurately produced a $166 refund.

When McKim tried contacting Neighborhood Advance Tax in August to demand her money back, she discovered the company’s nine offices were closed for the tax season.

In addition, nearly all of the company’s phone lines appeared to have been disconnected.

The only exception was the phone line for the company’s Kissimmee office, which had an outgoing voicemail message instructing customers to send an email if they “received any paperwork from the IRS.”

McKim said she never received a response to her email.

“Everyone disappeared, and nobody has an answer,” McKim said.

Similar complaints against tax company surface

At least six customers have filed complaints with the Better Business Bureau since March alleging that Neighborhood Advance Tax filed erroneous tax returns on behalf of clients that prompted IRS audits.

The company’s failure to respond to those complaints have prompted the nonprofit consumer organization to issue Neighborhood Advance Tax its "F" rating.

Florida’s Department of Agriculture and Consumer Services has received at least one complaint, which an agency spokesperson said it forwarded to the IRS.

News 6 has spoken with three other former customers who say they, too, were audited by the IRS after Neighborhood Advance Tax submitted erroneous tax returns.

“They told me they can get me a bigger refund because they itemize everything,” said Doreen Bowden, who visited the company’s Daytona Beach office.

Bowden was not familiar with new tax code changes that increased the standard deduction amount and prompted fewer taxpayers to itemize deductions.

Bowden expected Neighborhood Advance Tax to know the latest tax laws.

“You’re thinking if they’re doing things, it’s legit,” Bowden said.

Originally the tax preparer informed Bowden that she and her husband would be receiving a $4,379 refund, records show.

But after Bowden was audited by the IRS, she learned they were not entitled to any refund and instead owed the federal government an additional $1,095 in income taxes.

Bowden said she did not realize her tax return contained improper deductions and inflated charitable contributions until she was audited.

“I would never do something like that, especially with the IRS,” Bowden said. “I’m a very scared person.”

Like McKim and other customers, Bowden said she was unable to contact anyone at Neighborhood Advance Tax for assistance after the IRS audited her return.

Records show the company deducted $1,058 in tax preparation fees from Bowden’s original tax refund before she was required to repay it

“I think they should give everybody their fee back,” she said.

Company owner vows to improve customer service

News 6 was unable to reach Neighborhood Advance Tax representatives by calling the company’s nine phone numbers, sending emails to company offices or by submitting an online form on the company’s website.

News 6 eventually contacted one of the company’s owners on his personal cellphone and inquired about the customer complaints.

“Have they reached out to a manager and asked to speak to someone?,” Carter asked a News 6 reporter, apparently unaware that it was extremely difficult for customers and others to contact his company.

Carter could not immediately comment on specific customer complaints since neither he nor his staff had apparently received them.

However, Carter vowed to improve his company’s ability to responds to customers.

“We just expanded our customer service team and will start reaching out to clients for amendments and refunds,” Carter said. “(We) just want to get everything resolved.”

Days after News 6 contacted Carter, the company established a new phone line to accept customer calls when the offices were closed and issued the following statement:

“If you have received a letter from the IRS with any errors about your taxes and have tried to reach us via one of our local offices or direct phone number, you can reach us our customer service department directly at 1-877-746-6104. We truly apologize for the inconvenience due to change of management and the unexpected Covid-19 virus it cause a disruption for everyone. However it is still our duty to service all clients and perform our due diligence in a timely manner for all services rendered to you. We now have a new management team in place and larger customer service staff to assist all of our clients needs. We truly apologize for any inconvenience this may have caused. Please reach out to us here via our new customer service line or”

IRS advice on finding a tax preparation company

An IRS representative would not confirm the agency had received complaints about Neighborhood Advance Tax or whether it was investigating the tax preparation company.

“Strict privacy laws protect every individual, business entity and Exempt Organization from unauthorized disclosures of details of their relationship with the IRS,” an IRS spokesperson told News 6.

The IRS website provides advice on how to choose a tax preparer as well as how to file a complaint against a tax preparer.

About the Author:

Emmy Award-winning investigative reporter Mike DeForest has been covering Central Florida news for more than two decades. Mike joined News 6 just as Florida officials began counting hanging chads in the aftermath of the 2000 presidential election. Since then, he has covered some of the biggest news events in Central Florida.