MSN Money reports the federal government is attempting to shut down over 125 Jackson Hewitt tax outlets in four states for performing systematic “tax-fraud schemes.” Jackson Hewitt is the nation’s 2nd largest tax preparer, behind H&R Block. The franchises in question were wholly or partially owned by Farrukh Sohail.
The Justice Department stated these specific franchises have defrauded the government of more than $70 million. Some of the allegations of fraud include false W-2 forms, fraudulant deductions and fuel-tax credits, and false claims for for the earned-income tax credit.
The allegations state that Sohail and the other defendants purposefully and defrauded the government on a massive scale. The Justice Department also alleges the business environment at these franchises encouraged fraud and the filing of questionable forms and documents. Some employees also allegedly received kickbacks for perpetrating this fraud.
The article did not specify the four states by name, but it mentioned that suits had been filed in the federal courts in Chicago, Atlanta, Detroit, and Raleigh, NC. So I assume the states are Illinois, Georiga, Michigan and North Carolina.
So what does this all mean? Well, it seems as though this is localized to only 125 franchises and does not mean that Jackson Hewitt as a company is committing this fraud. It appears as though these particular franchises were facilitating fraud commited by individual tax payers, and padding returns to increase refunds. I would assume that it also means that if you did business at any of these franchises, that your tax return may have a higher chance of being audited.
What should you do if you believe your tax return was completed at one of these franchises? I would highly recommend thoroughly going back over your taxes or paying a professional accountant to do so for you. It would be money well spent. If you find anything suspicious, I would recommend contacting a tax professional or lawyer for specific advice.
What should you do if you committed the fraud? Shame on you. Turn yourself in and hope the government is in a lenient mood.
