Feds Shut Down Dozens of Jackson Hewitt Tax Services

WASHINGTON – The U.S. Justice Department and the Internal Revenue Service filed suit yesterday to shut down 125 Jackson Hewitt franchises, claiming they were engaged in a broad tax return fraud, some of it surrounding returns for the federal earned income tax credit. The tax preparers were charged in a civil suit with providing false tax returns based on phony W-2 forms; using fabricated businesses and business expenses on returns to claim bogus deductions; and a massive fraud related to claiming the federal earned income tax credit–a service with which they partner with dozens of credit unions. The suit, coming at the height of tax season, alleges more than $70 million in combined losses to the U.S. Treasury. All of the targeted Jackson Hewitts, in Chicago, Atlanta, Detroit and Raleigh, N.C., operate under franchise agreements with Jackson Hewitt Tax Services of Parsippany, N.J., the nation’s largest tax preparation firm.