Liberty Tax Responds to Lawsuit Against Franchisee

VIRGINIA BEACH, VA--(Marketwired - Feb 10, 2016) - Liberty Tax, Inc. became aware Monday of a lawsuit seeking to bar one of its franchisees from the tax preparation business. 

"Liberty Tax has a robust compliance program, and we expect our franchisees to make sure that their offices comply with all federal and state tax requirements," noted Jim Wheaton, Liberty Tax's Chief Compliance Officer. "Monday's allegations appear to be limited to a small number of independently-owned franchised offices and prior year returns. We will take appropriate action after completing a review of both current year and prior operations at these offices," said Wheaton. Wheaton noted that the franchisee had failed to notify Liberty Tax of the investigation that was mentioned in the lawsuit.

John T. Hewitt, President, CEO and Founder of Liberty Tax, stated, "There is no place in the Liberty Tax system for franchisees or preparers who commit fraud or who take other shortcuts. We created a separate compliance group, and named a Chief Compliance Officer last year, in order to be able to respond quickly to compliance concerns." Hewitt said franchisees have been reminded of the importance of maintaining the integrity of the Liberty Tax brand, and of consequences, including franchise termination and reporting to tax authorities, that the company will exercise against franchisees who commit or permit the commission of inappropriate behavior.

"We are proud of the service our franchisees and their preparers provide in more than 4,000 offices throughout the U.S. and Canada," Hewitt said. "This action involves a very small number of our independently-owned offices. We certainly hope that any issues with these offices will turn out to be less serious than originally reported, but we are committed to resolving these matters. In a system that includes thousands of offices and 35,000 tax preparers hired by our franchisees each year, it may be inevitable that some franchisees and preparers, or their customers, will engage in behavior that Liberty does not condone and will not tolerate. We understand our obligation not only to the public and our customers, but also to the vast majority of our franchisees who are committed to preparing taxes the right way, and who do not deserve to be tarnished by accusations against a small minority."

Wheaton noted that as part of Liberty Tax's compliance program, Liberty has expanded its data analysis capabilities in the last two years, allowing it to identify trends and other concerns more quickly than in prior years, and that among Liberty's other compliance tools, Liberty is able to terminate franchisees, report franchisees and preparers to the IRS, block the electronic filing of returns, and blacklist non-compliant preparers so that they are barred from employment by any Liberty Tax franchisee.

About Liberty Tax, Inc.
Founded in 1997 by CEO John T. Hewitt, Liberty Tax, Inc. is the parent company of Liberty Tax Service. Liberty Tax is one of the fastest-growing tax preparation franchises and has prepared almost 20 million individual income tax returns in more than 4,300 offices and online. Liberty Tax's online services are available through eSmart Tax, Liberty Online and DIY Tax, and are all backed by the tax professionals at Liberty Tax locations and its nationwide network of approximately 35,000 seasonal tax preparers. Liberty Tax also supports local communities with fundraising endeavors and contributes as a national sponsor for many charitable causes. For a more in-depth look, visit Liberty Tax Service and interact with Liberty Tax on Twitter and Facebook.