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Department of Consumer and Worker Protection Warns New Yorkers of Predatory Tax Preparers
December 18, 2024
NEW YORK, NY – NYC Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga reminds New Yorkers to protect themselves and their small businesses from predatory tax preparers as the tax season approaches. DCWP encourages New Yorkers who earned $65,000 as single filers, or $93,000 for families, to use NYC Free Tax Prep and save on tax preparer fees, which averaged more than $300 last tax season.
“If you qualify for NYC Free Tax Prep services, we urge you to file with us this upcoming tax season and get your full refund at no cost to you,” said DCWP Commissioner Vilda Vera Mayuga. “While the IRS has not yet announced when they’ll start accepting returns for the upcoming tax season, New Yorkers should be wary of predatory tax preparers who try to attract them with promises of advance refunds and Refund Anticipation Loans. If you believe your consumer rights have been violated by a paid tax preparer, please reach out and file a complaint with us.”
By law, tax preparers must give every filer a copy of the Consumer Bill of Rights Regarding Tax Preparers, which is available in multiple languages, before beginning any discussions about tax preparation services. New Yorkers should be on alert for preparers that overcharge, charge hidden fees, or file a return without permission. Throughout last tax season, DCWP inspectors issued 84 violations to paid tax preparers for violating the city’s laws around disclosure of consumer rights, failing to provide information about fees charged, among others. Consumers can file a complaint about tax preparers with DCWP by calling 311 or visiting nyc.gov/dcwp.
Predatory tax preparer tactics include offering refund advances in the form of an anticipation check or a gift card - enticing filers who look forward to receiving their refunds sooner. Refund Anticipation Loans (RALs), or “express refund advances,” are sometimes advertised as “interest free” and typically offer a portion of a filer’s expected refund. Even when RALs do not include fees or interest, some preparers may charge borrowers higher fees.
Refund Anticipation Checks (RACs), or “refund transfers,” require consumers to agree to have their tax preparation fees deducted directly from their refund for an additional fee. Depending on the product, paid preparers may help the filer open a temporary bank account, with potential transfer fees and other product costs.
Consumers should wait until they receive their final tax statements from their employer, such as a W-2 or 1099, in January to prepare their return, and not use a paystub or past year’s information. This ensures they are filing with the same data the IRS and the New York State Department of Taxation and Finance have on file.
This coming tax season, when the IRS begins accepting returns in January, New Yorkers who earned $93,000 or less for families, or $65,000 or less as single filers in 2024 will be eligible to file for free with an IRS certified volunteer preparer using NYC Free Tax Prep.
Last year, DCWP launched NYC Free Tax Prep for Self-Employed Filers, offering specialized tax preparation services for gig workers, freelancers and small business owners who often face barriers to filing taxes and managing financial recordkeeping. All self-employed New Yorkers are eligible for our workshops and one-on-one consultations, but only those who make up to $65,000 as single filers, or $93,000 for families, and have business expenses under $250,000 are eligible for free annual and quarterly estimated tax preparation services.
NYC Free Tax Prep offers a variety of free tax prep options, including in-person, virtual, and drop-off options. For more information, contact 311 or visit nyc.gov/TaxPrep.
The NYC Department of Consumer and Worker Protection (DCWP)—formerly the Department of Consumer Affairs (DCA)—protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCWP licenses more than 45,000 businesses in more than 40 industries and enforces key consumer protection, licensing, and workplace laws that apply to countless more. By supporting businesses through equitable enforcement and access to resources and, by helping to resolve complaints, DCWP protects the marketplace from predatory practices and strives to create a culture of compliance. Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCWP empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance. DCWP also conducts research and advocates for public policy that furthers its work to support New York City’s communities. For more information about DCWP and its work, call 311 or visit DCWP at nyc.gov/dcwp or on its social media sites, Twitter, Facebook, Instagram, and YouTube.
Media Contacts:
Michael Lanza / Stephany Vasquez Sanchez
Department of Consumer and Worker Protection
(212) 436-0042
press@dcwp.nyc.gov