Instant Tax Service franchise owner denies wrongdoing

Edmonds, a certified public accountant who is president of Missouri Residential Care Services, has denied that he or any of his employees sold information about tax filers’ dependents or preyed on mentally disabled and poor people by stating false income to obtain fraudulent tax returns. Such claims are at the heart of the IRS investigation.

“I’m – by no means – claiming to be perfect. We are human, but there was no organized scheme to file false returns or anything of that nature,” said Edmonds, who has hired Springfield defense attorney Dee Wampler.

No arrests have been made and no charges have been filed in connection with the investigation, Wampler said, adding that Edmonds’ main offices are still open.

Dayton, Ohio-based Instant Tax Service markets itself as a tax-time option for people who won’t likely owe the government any income tax, Edmonds said. The company promises fast refunds and cash advances based on projected refunds. Instant Tax Service is a commission-based business.

“For most people, they want their money right now, and that’s the niche market we focused on,” Edmonds said. “We’re the Starbucks of the retail tax preparation industry.”

The IRS began investigating Instant Tax Service after another local tax service alleged that one of Edmonds’ employees attempted to sell a dependent’s personal information to a client for $900, according to the search warrant affidavit.

The Missouri Attorney General’s office also received six complaints about Instant Tax Service, including one from a former employee who alleged that Edmonds was using false information for fraudulent tax returns.

One complainant seeking a cash advance said the Instant Tax Service office at 2725 N. Kansas Expressway, Ste. 104, filed his taxes without W-2 forms or his consent.

“The income they reported based off my last pay stub is incorrect,” he wrote.

Of 1,880 tax returns prepared by Instant Tax Service for 2006, only 14 returns were filed with taxes owed for a 99.3 percent return rate, according to the affidavit. Records show Edmonds’ franchise processed $4.1 million in tax refunds. That’s an average refund of more than $2,200 per client.

The 99 percent return rate doesn’t surprise Edmonds, who reiterated that his clientele typically doesn’t owe taxes. Edmonds said the bulk of his business occurs in January, February and early March, while many people who owe taxes often wait to file closer to the mid-April deadline.

Edmonds, who is in his second season as an Instant Tax Service franchisee, also dismissed claims that his business preyed on unsophisticated people unfamiliar with tax and lending laws.

At his Park Central West office opposite the City Utilities bus terminal in downtown Springfield, handwritten signs in the window beckoned customers with hot chocolate, candy and soda earlier this year. The refreshments are meant to make customers comfortable, Edmonds said, noting that many people who weren’t clients used the downtown office as a winter warming station.

Edmonds and attorney Wampler have both cast doubt on the former employees cited in the IRS affidavit.

“In any large business, especially one that has a lot of satellite offices, you are going to get disgruntled employees,” Wampler said. “I believe that’s what’s happened here.”

Edmonds did not elaborate on why a former employee might make such serious allegations about his business to authorities, but he said he’s confident the investigation will eventually separate fact from fiction.

“I truly believe in the American system. And I truly believe when it’s all said and done it will come out that none of this happened,” he said.

Wampler said IRS agents seized a “voluminous” amount of material from the offices – five in Springfield and one each in Ozark, Republic and Marshfield – that will likely take several months to sift through.

Wampler has already conducted several interviews and is “elated” about his client’s standing in the community.

Edmonds is the immediate past-president of the Missouri Assisted Living Association board of directors, and he was employed as a staff accountant with Whitlock, Selim & Keehn in the 1990s.

WSK’s managing partner, David Myers, said Edmonds had an “entrepreneurial spirit” that led him to a “nice niche” in nursing home billing.

Myers said many CPAs share the same opinion about tax preparation offices that court clients with quick cash.

“In most CPA firms, we’re all leery of the ones that push refund-anticipation loans and the car lots that set up tax services to get down payments,” he said. “That’s kind of bottom of the barrel.”

In September, a Chicago man who worked at an Instant Tax Service office was sentenced to 46 months in prison and three years for filing false claims on 72 federal income tax returns. Following an IRS investigation, he was ordered to pay $330,859 in restitution for overstating clients’ income so they could qualify for earned-income tax credits and increasing his clients’ tax refund amounts by claiming dependent children who weren’t related to his clients.[[In-content Ad]]