Friday, June 11, 2010

Daddy's Money Pawn Shop is a "full-service" operation--they'll do your taxes too

Slate Magazine is running an excerpt from Gary Rivlin's new book Broke USA: How the Working Poor Became Big Business. The Slate excerpt focuses on Tim Thomas, owner of Daddy's Money Pawn Shop in Wichita, Kansas, which provides "tax preperation" [sic] and "rapid refunds" as well as traditional pawnshop services, payday loans, and check cashing. As the article describes it, Mr. Thomas does not appear to have any particular background in tax or accounting. He started out in the vending machine business and wound up stumbling into the pawnshop business, which he runs as a "full-service financial center."

Almost every enterprise that’s part of the fringe economy takes a stab at the tax-return business. Tim Thomas’s experience at Daddy’s Money shows why so many take the plunge. Thomas charges $65 for every return he fills out—good compensation, he said, for a job that typically takes him less than 30 minutes. And while that’s the end of the work he must do, that’s just the start of the ways in which he is remunerated for his efforts.

The pages of Cheklist the monthly magazine of the check-cashing industry, are marbled with the ads of companies pitching their services as a no-fuss way of making money in the tax business. Refund Today (“NO Tax Knowledge Necessary”), for instance, offers a product it calls “EZ Refund”: Pay nothing out of pocket, its ad reads, and we provide the software you’ll need and also the back-office support. That means they take care of everything from electronically filing the completed tax return with the IRS to arranging the loan terms for those seeking a rapid refund. There’s also extra money to be earned providing what in the industry they call the refund-anticipation loan—a high-interest, short-term loan for those who don’t want to wait the two or so weeks it typically takes the IRS to mail out a refund check. Under Thomas’s deal, he earns $6 for every client who opts to take out one of these loans (most do, he said) and then at the end of the season receives a bonus check based on the volume of his loan business. In recent years, that’s meant an extra $2,000 to $3,000 in revenues.

The refund-anticipation loan pays off in two additional ways. There’s the extra check-cashing fees he earns from those who invariably choose to cash a check on the spot, and also the corresponding boost in pawn sales.

The full Slate excerpt is available here.

His website links to the Better Business Bureau, which gives him an A+ rating. The fees listed above are relatively modest compared to those that Brookings Institutions researchers found in their study of return preparers serving low-income working taxpayers.

On the other hand, the Daddy's Money website doesn't mention any credentials, training, continuing education, or membership in a professional association, just that "Daddy's Money tax service has been preparing filing taxes since 1999."

At least, Daddy's Money is on the list of IRS Authorized E-file providers. Here's a complete list of all the IRS E-file providers in the zipcode.

At least one of the other businesses, A LOAN AT LAST is also a pawnshop. CAR TAX appears to be a car dealership. The other authorized efile provider businesses listed below do not have websites nor Better Business Bureau ratings.

Authorized IRS e-file Providers

Name of Business: A LOAN AT LAST
Address: 3375 E 47TH ST SOUTH
City/State/Zip: WICHITA, KS 67216
Point of Contact: MONTE RAKESTRAW
Telephone: 316/312-5485

Name of Business: QUICK TAX SERVICE
Address: 3149 E TIMBERLANE
City/State/Zip: WICHITA, KS 67216
Point of Contact: Radmila Doroshkevich
Telephone: 316/518-6865

Name of Business: MOORE'S TAX SERVICE
Address: 1614 MILLS
City/State/Zip: WICHITA, KS 67216
Point of Contact: MARILYNN K MOORE
Telephone: 316/524-7677

Address: 4913 S BROADWAY
City/State/Zip: WICHITA, KS 67216
Point of Contact: TIMOTHY J THOMAS
Telephone: 316/529-8901

Name of Business: CAR TAX
Address: 3048 S BROADWAY
City/State/Zip: WICHITA, KS 67216
Point of Contact: RHONDA L MULRANEY
Telephone: 316/522-4222

Address: 2201 EAST MACARTHUR LOT C 10
City/State/Zip: WICHITA, KS 67216
Point of Contact: NEMMY N MATIRU
Telephone: 316/641-1089

Address: 1618 E 43RD ST S
City/State/Zip: WICHITA, KS 67216
Telephone: 316/522-2880

Name of Business: NANCY GOBLE
Address: 1107 LUTHER
City/State/Zip: SEDGWICK, KS 67216
Point of Contact: NANCY GOBLE
Telephone: 316/529-1558


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