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City cracks down on tax preparers

Updated: March 7, 2013 6:33AM

Mayor Rahm Emanuel was forced soften his plan to protect consumers against financial scams to satisfy businesses concerned about being stripped of their licenses for mere technical violations.

But the mayor apparently is not backing down on his crackdown on alleged fraud by those who help Chicagoans file their annual income tax returns.

Ninety-three tax preparers were recently investigated by the city. Nearly 97 percent were found to be in violation of city regulations governing their industry.

Some were operating without a license. Others failed to provide the required consumer bill of rights. Still others were allegedly operating illegally without state approval. Or they allegedly failed to provide the required written disclosure.

A total of 203 charges were filed against 90 businesses, potentially triggering $201,750 in city fines.

One tax-preparation business has received a “cease and desist” letter. Six got notices to correct licensing violations. An additional 196 received administrative notices of violation that require them to appear before city hearing officers.

Only three of the 93 businesses investigated by City Hall were found to be following city and state regulations to the letter.

“These businesses are scamming honest Chicagoans under the guise of helping them,” Emanuel, who was on jury duty at the Daley Center on Tuesday, was quoted as saying in a press release.

“There is no place in Chicago for businesses to take advantage of residents — and I absolutely will not stand for it.”

Last month, retailers, debt collectors and a handful of aldermen accused Emanuel of going too far in his quest to level the playing field for consumers.

They were concerned that Emanuel’s debt-collection ordinance — and companion legislation empowering the city bring the hammer down on businesses convicted of violating state and federal consumer protection acts — would strip businesses of their licenses for mere technical violations.

Emanuel salvaged the ordinance with some last-minute tweaks.

Instead of revoking or denying a business license for failing to get checks out on time, not paying vacation pay on time or underpaying workers, Emanuel agreed to require evidence of willful and wanton conduct or more than one instance of wrongdoing before bringing the hammer down.

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