Jackson Hewitt: The Plot Thickens

[George Boutwell]

From today's NY Times:

>>The Justice Department filed civil lawsuits in April accusing more than 125 Jackson Hewitt offices of knowingly enabling tens of thousands of middle- and lower-income people to obtain $70 million by falsifying their federal tax returns. Late last week, Jackson Hewitt Tax Service Inc. disclosed in a securities filing that the company itself was the subject of an Internal Revenue Service investigation.

. . . in its securities filing, Jackson Hewitt said: “The company has learned recently that the Internal Revenue Service is conducting additional examinations of tax-return preparation activities of Jackson Hewitt franchisees and company-owned stores. The company is also a subject of an I.R.S. investigation relating to these matters.”

Last month, Jackson Hewitt began an internal review of the company’s practices and procedures, hiring a retired I.R.S. commissioner, Fred T. Goldberg Jr., to oversee the review. Mr. Goldberg, a tax lawyer at Skadden Arps Slate Meagher & Flom, was also briefly the assistant secretary for tax policy in the Treasury in the early 1990s.

In its filing on Friday, Jackson Hewitt said that it “intends to complete the internal review promptly and to implement a variety of enhancements in the areas of compliance and monitoring for the 2008 filings season.”<<

[Luis Mopeo]

It's ironic that it's impossible to tell for sure whether the investigations into fraudulent refunds will help or hurt the company's business.

[BOB W]

[QUOTE=George Boutwell;39072]From today's NY Times:

>>
Last month, Jackson Hewitt began an internal review of the company’s practices and procedures, hiring a retired I.R.S. commissioner, Fred T. Goldberg Jr., to oversee the review. Mr. Goldberg, a tax lawyer at Skadden Arps Slate Meagher & Flom, was also briefly the assistant secretary for tax policy in the Treasury in the early 1990s.

<<[/QUOTE:

I hate when I see a former IRS employee, Commissioner is worse, hired to handle a case like this. It smells of big bucks paid for "insider" help to smooth a bad situation.......

[FEDUKE404]

Interesting Jackson-Hewitt background information

It's ironic that it's impossible to tell for sure whether the investigations into fraudulent refunds will help or hurt the company's business.

One would think the entire Jackson-Hewitt image potentially would be smeared, as the folks involved own a large number of offices in several metropolitan areas.

Regardless of the outcome, I do not believe the IRS lawsuits will go away.

The following makes for some extremely interesting reading:

http://www.usdoj.gov/tax/txdv07215.htm

Be sure at least to read the Smart Tax of NC (PDF file) info......the "all they need is to be able to do data entry.....a monkey can do this" comment by the owner about his preparers must be quite reassuring to those employees!

I do not think JTX would be a wise long-term investment.

FE

[erchess]

Big Bucks for Insider Knowledge

It strikes me as similar to what happens in Athletics - a successful coach or in the pros an above average player is paid to change sides.

This is what we get for having such a complex and ever changing tax code. The more you know about the system and how it works the more valuable you are to the taxing agency and to clients. Some clients only want you to determine their lowest legal tax obligation but there will always be those who want you break the rules to the extent that doing so makes sense from a purely financial point of view.

[Joe Btfsplk]

Good advertising for J-H

This will probably draw in more customers on the theory that every effort will be made to cheat the IRS more than the competition will risk.

[Jiggers]

Fraud &amp; J H and all others

Until heavy, very heavy, fines AND some jail time are assessed on those tax return preparers, this will continue until the end of time.

Just firing the employees won't solve a thing in the long run.

[lbbwest]

It's good to know they will cheat during 2007 filing season.

I think that I will have them do my tax return this year. lbb

[bertrans]

Jackson-Hewitt

The IRS is pursuing one particular owner of a subset of franchises, who, to date, has remained silent. The parent company, JH, which has declared that it is 'cooperating fully with the IRS', has hired as its attorney former IRS commissioner Fred Goldberg, who, as a commissioner, was very, very, very good. Any bets that JH, through Fred, is already preparing to sell the lone owner to the IRS - full cooperation. But,hey, I'm just spitballing.