1040 TaxBiz – Merchant Services Agreement
Virtual Credit Card Processing Terminal for Affiliate Offices

This Merchant Services Agreement ("Agreement") is entered into by and between Lee's Tax City, LLC / dba: 1040 TaxBiz (hereinafter referred to as 1040 TaxBiz) and the undersigned affiliate office (“Merchant” or “Affiliate”), collectively referred to as the “Parties.”

1. Purpose

This Agreement allows Affiliate to access and use 1040 TaxBiz’s Virtual Credit Card Processing Terminal (“VCPT”) to collect upfront payment from taxpayers for non-bank product returns.

2. Service Fees and Deposits

• Affiliate’s standard E-File Service Fee remains unchanged.

• A 5% processing fee will be applied to all amounts collected via the VCPT, based on the total tax preparation fee charged to the taxpayer.

• Weekly Deposits: After deducting the E-File Service Fee and the 10% processing fee, the net amount will be deposited into the Affiliate's designated account on a weekly basis.

3. Chargebacks

• If a taxpayer disputes a charge and initiates a chargeback, the Affiliate is fully responsible for reimbursing 1040 TaxBiz for:

  • The full chargeback amount, and

  • A $50 chargeback fee per incident.

• Recovery of Funds: 1040 TaxBiz reserves the right to:

  • Debit the Affiliate’s ACH account for the total amount due, or

  • Withhold funds from future payouts until the chargeback balance is satisfied.

• If chargeback amounts cannot be repaid within a reasonable time, 1040 TaxBiz may temporarily disable the Affiliate’s access to the VCPT & disable the Affiliate’s entire 1040 TaxBiz account until the outstanding balance is resolved in full.

4. Prohibited Practices

• Affiliates must not process unauthorized or fraudulent charges using the VCPT, including:

  • Charging a taxpayer's card without their written or digital authorization.

  • Charging fees inconsistent with the agreed-upon tax preparation services.

• If an Affiliate is found to be misusing the VCPT or submitting unauthorized transactions, 1040 TaxBiz reserves the right to:

  • Permanently revoke access to the VCPT, and/or

  • Disable the Affiliate’s entire 1040 TaxBiz account pending further investigation or indefinitely.

5. Fraud Prevention & Safeguards

To limit liability and reduce fraud risk:

• All card transactions must be authorized by the taxpayer in writing or electronically, and records must be retained for at least three (3) years.

• Affiliates must verify taxpayer identity prior to processing a card transaction.

• Affiliates must use the VCPT solely for tax preparation payments—no personal or unrelated transactions are permitted.

• Affiliates must notify 1040 TaxBiz immediately if there is suspected misuse, a security breach, or if card data has been compromised.

6. Termination

1040 TaxBiz reserves the right to suspend or terminate this Agreement and/or access to the VCPT at any time:

• For violation of any terms in this Agreement,

• Due to excessive chargebacks or fraudulent behavior,

• Or in its sole discretion to maintain the integrity and compliance of its merchant services program.

7. Indemnification

Affiliate agrees to indemnify, defend, and hold harmless 1040 TaxBiz from any claims, liabilities, chargebacks, losses, or damages (including legal fees) arising from:

• The Affiliate’s misuse of the VCPT,

• Non-compliance with applicable laws and card network rules,

• Fraudulent or unauthorized transactions.

8. Acknowledgment and Acceptance

By signing below or accepting the VCPT access credentials, Affiliate agrees to all terms in this Merchant Services Agreement and acknowledges their responsibilities regarding chargebacks, fraud prevention, and compliance.