Wednesday, February 08, 2012

No Mo Money

Anybody with an ounce of money management skills wouldn't deal with this company in the first place. Locally they have an F rating with the BBB and those low brow commercials don't give you a sense of  confidentiality either. It's like getting your taxes done at the barbershop. Why would you pay hundreds of dollars for something you can get done for free? But obviously thousands of filers in this country don't know that. Until this happened Mo Money Taxes had locations in seventeen states and growing. The customers go and pay huge fees to have their taxes processed even before they get their W-2 forms. Then pay $100's to cash the check at these check cashing joints or a designated bank. With whom you can bet there were some prior arrangements made. Mo Money was getting over like  the mob.

What happened is these country boys to ok their show on the road and got too big to be overlooked. Something had to be done to slow that money train down. The I.R.S. changed the program they had been using for seventeen years without telling them. They were beating H.R. Block and Jackson Hewett at their own game and paying no dues. Those companies have tax attorneys and lobbyist in Washington D.C. paying politicians and helping make the tax laws. Not thirty second comedy skits on local T.V. stations and advertising on underground radio stations. These young black men were making millions of dollars legally for something that should probably be against the law. As long as they stayed in Memphis and the surrounding area they had no problems. When they tried to stretch out and expand up North. That's when the problems started. The other week they were on the radio kicking the bobo with Thaddeus Matthews. I predicted the downfall then. They had no idea the sky was falling, or at least it would . seem. This will soon pass over, but the damage will already be done. Pride always comes before destruction   There  will be no mo money for a while.


Anonymous Anonymous said...

The federal government has instituted regulation of the tax prep industry and there are rules that must be followed including eitc due diligence, document retention, identity security, and banking regulations if you offer refund settlement products.

Every paid preparer is required to meet minimum requirements to be able to legally accept payment for the preparation of income taxes.
It is illegal to call a loan on your refund an "instant REFUND"
or a "30 second refund"

The provider is required to provide full and complete disclosure information to the customer.

Those are just some of the rules. The IRS can not "Change" tax prep software or change paid preparer information without notice. I simple check at IRS.GOV has a tab for paid preparers that cover all requirements.

Its not an issue of size either. There are many many regional tax prep firms that are larger than Mo Money.

Mo Money was not singled out. Mo Money did not follow federal regulations. H&R Block had big issues last year with bank regulators and they LOST their case causing them to not be able to offer refund anticipation loans in tax season 2011.
The federal govt has been cracking down on predatory lending on tax refunds for the past several years. There is only one bank providing refund anticipation loans this tax season and they are being regulated out after this tax season.

Mo Money's business model is charging higher than industry averages for tax prep services and offering loans on those refunds.

That business model is unstable in todays regulatory environment and the problems Mo Money is facing is more likely due to poor planning, a failed business model, and failure to follow the guidelines for the paid preparer industry as spelled out on IRS's website.

2:20 PM  

Post a Comment

Subscribe to Post Comments [Atom]

<< Home