Many taxpayers use chains such as H&R Block or Jackson Hewitt to prepare their returns. One Jackson Hewitt franchisee is in trouble having been accused of multiple charges of tax fraud.
The IRS alleges that 125 Jackson Hewitt stores in four states (Illinois, Michigan, North Carolina and Georgia), owned in full or in part by Farrukh Sohail, engaged in systematic tax fraud. The franchised stores allegedly created phony deductions, artificial earned income credits, fake W-2’s, and false fuel credit claims. The IRS is asking for these stores to be closed.
According to the lawsuits filed on behalf of the IRS, a sample showed that 31% of the returns prepared in the impacted stores had major problems. The IRS also alleges that managers in the impacted stores received kickbacks for filing false returns.
Needless to say, you should always review your tax return whether you use a professional or you do it yourself. You are responsible for what’s on it.
I don’t like to see any portion of the tax preparation industry getting a black eye. This case reminds me of the Western Tax Service case of a few years ago. That one was local; this appears to be centered in Chicago. If these charges are proved correct, I’d expect criminal indictments in the future.