Missouri and Illinois are cracking down on a national tax preparation chain known to target low-income individuals, alleging violations when it comes to refunds and hidden fees.

Attorneys general in both states have filed lawsuits against MoneyCo USA, also known as Mo' Money, which operates tax preparation offices in 17 Midwestern and Southern states and Washington, D.C.

A lawsuit filed March 6 by Missouri Attorney General Chris Koster claims MoneyCo USA failed to distribute IRS refunds to consumers and committed various other violations of state law. A similar case is in Illinois, where a suit filed March 13 alleges Mo' Money charged hidden fees and filed returns with false information and no authorization from taxpayers. News releases from both attorney general offices warn taxpayers to watch out for common scams.

The Missouri suit includes allegations against the parent company and two St. Louis franchises. All of the company's offices in the state are in St. Louis or surrounding areas, apart from an office at 630 Good Hope St. in Cape Girardeau.

The Cape Girardeau office was closed Tuesday, and repeated calls to the office number were automatically forwarded to a cellphone voicemail box that was stated to be full. A check with the Cape Girardeau business license office found no license on file for the business, but a representative said seasonal tax preparation offices sometimes get licensing from the state and aren't always required to apply for a license through the city.

No complaints have been filed with the county prosecuting attorney's office or Cape Girardeau police in connection with MoneyCo USA's local office. Koster's office did not return a call Tuesday.

Alan Kridelbaugh, a certified tax fraud examiner and certified public accountant with Begley, Young, Unterreiner & White in Cape Girardeau, warns against the use of tax refund anticipation programs through companies that could have employees with a history of scamming consumers and little to no education on filing tax returns.

"Electronic filing has really opened up the door to make it easier for a lot of people to commit tax fraud," he said. "And there are some things out there that can make an even bigger mess."

Kridelbaugh is currently helping a client who went to another tax preparer who turned in their tax forms with $40,000 in itemized deductions when the taxpayer should have only qualified for a standard deduction. Those scams are possible, he said, when tax preparers don't ask permission to submit itemized deductions, but do it anyway and have the resulting refund money directed to their account.

"There is an option on a form that allows a refund to be split between accounts," he said. "It could mean there is $1,500 going in your account, and $2,000 going into another account that belongs to the tax preparer."

Keeping a signed copy of IRS form 8879 that will always match what the IRS has on file can help prove a refund went to more than one account, Kridelbaugh said. Many times when this scam is committed, people won't know for a while.

"They'll never figure it out unless the IRS contacts them and does an audit," he said.

eragan@semissourian.com

388-3627

Pertinent address:

630 Good Hope St., Cape Girardeau, MO