Jackson Hewitt Tax Service Franchises Accused of $70 Million Tax Fraud Scheme
The country’s second-largest tax preparer needs someone to stand by them. The Department of Justice has filed suit against five companies that operate Jackson Hewitt Tax Services, Inc. (JTX) franchises, stating that the firms contributed to tax fraud that cheated the U.S. Treasury out of more than $70 million. Further, the Government is attempting to shut down more than 125 of the Jackson Hewitt tax preparation stores for engaging in pervasive “tax fraud schemes.”
“Preparing federal income tax returns based on falsehood and fabrication is a serious violation of the law,” Assistant Attorney General Eileen O’Connor stated. An example of the scheme was the case of a barber whose tax return prepared by Jackson Hweill claimed entitlement to a fuel tax credit for 25,000 gallons of gasoline. According to the complaint filed by the Government, in order to consume that much fuel, the barber would have had to drive over 1,000 miles every day, seven days a week for a year. Further the lawsuit claims that these franchises created an environment in which “fraudulent tax return preparation is encouraged and flourishes,” together with the fact that some employees received kickbacks for preparing false tax returns for clients.
