Tax and accounting franchisor ATAX has been blocked from soliciting franchisees of Liberty Tax. The company also will pay more than $500,000 in recently settling a suit filed by Liberty in February 2021.It’s the latest setback for ATAX, whose founder and CEO Rafael Alvarez and ATAX New York, were barred last summer from preparing tax returns for others and ordered to discharge $159,000 to the United States for a pattern of tax return fraud.
ATAX has 78 locations, concentrated on the East Coast, that provide accounting, bookkeeping, payroll and tax services. In an interview in 2020, Alvarez sad he expected to have 400 locations at the end of 2021. Born in the Dominican Republic, Alvarez’s business has been strong in the Hispanic community.
ATAX is permanently enjoined from interfering with Liberty’s franchise agreements and diverting or interfering with leases or planning off any ATAX products or services as those of Liberty. Liberty’s suit claimed unfair competition, tortious interference, false designation of origin, and trademark infringement, among w several other causes for action.
ATAX has 32 stores in New York, 13 in Florida and 10 omn New Jersey. There are also stores in Arizona, Colorado, Connecticut, Georgia, Illinois, Maryland, Missouri, Nevada, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee and Virginia.
The case against the ATAX New York operations said that company had prepared 36,000 returns from 2016 through 2019.
