Free Tax Offer Ends Up Costing One Taxpayer

CENTENNIAL, Colo (CBS4) It's tax time and the Internal Revenue Service says that 75-percent of Americans will get a refund. That has many tax payers rushing to get their taxes done. Some tax companies are offering free tax preparations under specific conditions, but there have been complaints that free isn't always free. The Better Business Bureau reports getting several complaints from people who went for a free offer but ended up having to pay. It's what happened to Ann Gollobitz.

"I had just my W-2 and a 1099 social security," Gollobitz told CBS4.

She was drawn in by an offer for free 1040EZ preparation at the Jackson Hewett in Walmart. She showed her paperwork to three different Jackson Hewett employees and each time they told her she qualified.

"They said, 'Yes, you do qualify for the free 1040EZ'," Gollobitz explained.

She agreed to have them prepare her taxes. 45 minutes later, the preparer told her she owed $164, add on a transfer fee, and an account handling fee, the total came to $213.

"When he told me it was $164 rather than free he said it was because I fell into a senior plan," Gollobitz said.

Gollobitz said that none of the preparers told her about the senior plan when she asked if she qualified. The free flyer makes no mention of a charge for a senior plan.

"I definitely thought it was a bait and switch deal," Gollobitz said.

CBS4 contacted Jackson Hewitt. In an e-mail response, the tax service said, "Clients need to present all of their tax documentation in advance." Gollobitz says she did that.

The e-mail goes on to say, "Social Security income cannot be reported on Form 1040EZ." Jackson Hewitt agreed to look into Gollobitz's situation.

There are several ways that tax payers can get their taxes done for free. Tax Help Colorado pairs people with a certified tax preparer. The benefit of going to a professional is finding deductions you might miss.

"I probably made a little more than I thought I was going to make back," said Katie Cain, a Tax Help Colorado client.

Tax Help Colorado has preparation sites open every Saturday through April 15th. The program is limited to people making less than $50,000 a year. You can call 211 to get more information about dates, times and qualifications for the program.

"We can still do things like itemized deductions, tuition credits, and home mortgage deductions. No complicated small business returns," said Randy McCall, a Key Bank employee and an organizer with Tax Help Colorado.

The Internal Revenue Service (IRS) offers Free File for people making less than $57,000 a year. The program is a partnership with commercial filing websites, but you have to access the commercial sites through the IRS website.

Ann Gollobitz would have met the qualification for both of these programs, and could have gotten her taxes done for free.

"I think Jackson Hewitt needs to be much more careful about stating what their fees are going to be upfront and not luring people in," Gollobitz said.

Jackson Hewitt was very responsive to Gollobitz's complaint. They are looking into why she got misinformation, in the meantime they've refunded the money she paid for her return and offered to do her taxes for free next year. The tax service stresses that it's preparers work hard to make sure customers are fully informed about their options and know what they qualify for and what they will pay. Customers can also cancel the transaction at any point before the return is sent. So if you don't feel comfortable with the fee that's being charged you can stop the process. Finally, Jackson Hewitt encourages customers to ask questions throughout the entire process so they feel comfortable with the preparation, the cost and the credentials of the preparer.
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- Written for the Web by CBS4 Special Projects Producer Libby Smith