Monday, February 4, 2013

Instant Tax Service franchisee can't do tax prep in KC after court ruling

Posted By on Mon, Feb 4, 2013 at 9:11 AM

Back in 2010, Kansas Citians werent happy with Instant Tax Service.
  • Justin Kendall
  • Back in 2010, Kansas Citians weren't happy with Instant Tax Service.
Tax preparation offices around the metro are getting busy, but six Instant Tax Service locations won't be helping Kansas Citians with taxes this year. A federal judge in a Kansas City, Kansas, court permanently barred an ITS franchisee, A&S Tax Services LLC owned by Semere Tsehaye of St. Louis, from "further operating or preparing federal tax returns for others." The government alleges that Tsehaye instructed employees to "engage in systematic and pervasive tax fraud." Employees allegedly prepared false claims with incorrect income and expenses, items pertaining to "phony" companies and education and dependent-care credits to inflate the Earned Income Tax Credit for clients.

While Teshaye agreed to abide by the terms of the injunction, he admitted no fault. A&S Tax Services will pay $100,000 in civil tax penalties. Instant Tax Service has five location in Kansas City, Missouri, and one shop in Kansas City, Kansas. Last August, Tsehaye's brother, Ahferom Goitom, who managed the KCK store, was barred from preparing tax returns. The Justice Department filed civil injunctions against ITS and the owners of five of the largest franchises in St. Louis, Chicago, Indianapolis, Las Vegas and Kansas City last March. The complaint maintained that allegedly fraudulent returns in those five cities had cost the government an estimated $16 million in tax losses.

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