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Valley tax business blamed for missing refunds

Posted at 4:02 PM, Oct 09, 2014
and last updated 2017-07-20 14:49:07-04

Two Valley women hired a business to prepare their taxes, but months after they were supposed to receive their refunds, they say all they've received is a bad check and a long list of excuses.

They "Let Joe Know" and we started investigating and searching for answers -- even locating the owner and confronting him.

Natalie Casas said she was expecting a refund for $4,307 after having her taxes prepared by Tio Sam Taxes which has six locations around the Valley. The business is owned by Erik Ketelaar.

"They assured me that it would be a couple weeks," she said. She received a check that has Ketelaar's signature on it, but the bank said the account had no funds. Natalie's tax return even lists Ketelaar as her preparer.

Araceli Flores has also been waiting for her refund check. The total amount: $1,270. She hasn't received it and said Ketelaar has only offered up excuse after excuse.

"I'm a college student and definitely need it for tuition, books and stuff," Flores said.

Both women said the company has put the blame on the Internal Revenue Service. However, when the women checked the status of their refunds on the IRS' website, it said their refunds had been deposited weeks earlier. The problem? The money was deposited into accounts the women didn't have access to.

"I was like, 'then where's my money,'" Flores said.

In both cases, Tio Sam Taxes was supposed to have the client refund deposited into a separate bank account. Then the company would deduct the $249 tax preparation fee and cut a check with the remaining balance to the clients including Casas and Flores. That didn't happen.

And,  there are potentially others who are still waiting for their refund checks.

The Let Joe Know team uncovered internal documents related to Tio Sam Taxes and counted 157 invoices, including those of Casas and Flores.

Those invoices listed the $249 tax prep fee, but also included charges for consulting, reviewing and calling the IRS. The business charges $200 an hour for that. 

Both women's invoices were for the exact amount of their refunds.

We caught up with Ketelaar outside a Tempe business and asked where the refunds were. He refused to answer our questions, hopped in his car and drove away.

However, when ABC15 reached out to him earlier through email, he responded.

He said the invoices we received may not be accurate. "We have had several employees and managers misrepresent the company and not perform to their fiduciary duty. Due to an ongoing internal investigation, we cannot comment further on this matter," he wrote.

In that same email he discussed that charge to talk with the IRS, "We do charge a standard $200 an hour rate for a CPA to contact the IRS to get them to issue the refund. Additionally, all of the invoices are reviewed for reasonableness (to the extent that the invoiced charges exceed the refund, we have a general policy of adjusting our charges)," he wrote.

But if the money is not being held to pay for services, where is it?

In those same e-mails to us, Ketelaar blames "IRS audits...quality control issues...600 clients that owe our company money...regulations that have been updated" and finally an increase in customers that "possibly overwhelmed us this tax season."

He said he's working toward supplying refunds for all clients per the client contract.

"I also offer a humble apology on my behalf, since I am the one who made the hiring and partnering decisions," he said in an email.

For now, these two women are still without their refund checks and they don't have an exact date on when, or if, they will receive them.

"There's lots of things that we had to put off because this money hasn't gone through," said Casas.

This does offer a warning and a lesson when using any tax preparation service.

In the Tio Sam Tax cases we reviewed, the refunds were not going into customers bank accounts. They were going into other accounts where customers were not allowed access. That allows the tax preparation service to control the money.

Even if you don't have a bank account, you can request a paper check from the IRS.

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