Jackson Hewitt Franchise Mess Hurts All Franchisees
April 4, 2007 by Sean Kelly
Filed under Business
Just when I thought we could get back to more positive franchise topics… A Jackson Hewitt franchisee proves that corruption’s not just for franchisors and consultants anymore…
Tuesday, the U.S. Justice Department announced that it sued five Jackson Hewitt Tax Service Inc. franchise companies for allegedly filing $70 million worth of illegal tax returns.
The DOJ claims that 125 Jackson Hewitt outlets in the Chicago, Atlanta, Detroit and Raleigh, N.C., areas filed bogus tax returns, and that some franchise managers and employees got kickbacks from customers in return for helping file the phony returns.
Jackson Hewitt tax preparers were accused of creating fake deductions, falsifying W-2 forms and fabricating business expenses.
Two dozen employees were named as defendants in the suit, including Farrukh Sohail – the sole or partial owner of the five companies that own the franchises.
With more than 6,500 franchise or corporate-owned stores, the Jackson-Hewitt organization is the nation’s second largest tax return company behind H&R Block.
Not only did this news have a disastrous impact on Jackson Hewitt stock prices, it will have a devastating effect on the many law-abiding JH franchise owners who must now market their services under the cloud of bad press and controversy. Here’s a smattering:
S&P Downgrades Jackson Hewitt to Hold
BusinessWeek
The US Justice Department has filed suit against a Jackson Hewitt franchisee that operates about 2% of total Jackson Hewitt locations. …
US Government Sues Jackson Hewitt Tax Preparation Franchises in …
Media Newswire (press release), NY
WASHINGTON — The United States has filed civil injunction suits against five corporations that operate Jackson Hewitt tax preparation franchises, …
Jackson Hewitt Franchises Cited for Fraud
abc11tv.com, NC
(04/04/07 — WASHINGTON, DC) – The government says it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in North Carolina and three …
Jackson Hewitt franchises cited for bogus tax returns
Grand Haven Tribune, MI – 39 minutes ago
WASHINGTON — The government said Tuesday it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in four states, including Michigan, …
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Jackson Hewitt Accused Of Tax Fraud In Illinois, 3 Other States
WBBM780, Chicago
(AP) — The government says it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in four states, including Illinois, for systematic …
Feds sue Jackson Hewitt franchises with ties to Atlantan
Washington Business Journal, DC
The five corporations allegedly operate more than 125 Jackson Hewitt retail tax preparation stores in the Chicago, Atlanta, Detroit and Raleigh-Durham, NC, …
Analyst: Fraud allegations could do ‘lasting’ damage to NJ tax …
Asbury Park Press, NJ
The government said Tuesday it was suing to shut 125 Jackson Hewitt franchise offices as the IRS accused them of submitting thousands of fraudulent tax …
Jackson Hewitt Franchises Cited For Bogus Tax Returns
WFMY News 2, NC
The government says it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in North Carolina and three other states. …
Jackson Hewitt franchises cited for bogus tax returns
WWAY NewsChannel 3, NC
WASHINGTON (AP) — The government says it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in North Carolina and three other …
Some Jackson Hewitt Stores Cited For Bogus Tax Returns
WTKR Your NewsChannel 3, VA
The government says it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in North Carolina and three other states for systematic …
Feds Slap Tax Offices With Fraud Suit
All Headline News – 1 hour ago
based attorney, told the Journal-Constitution that his client would not stop preparing tax returns at the Jackson Hewitt franchises, but hoped “to work …
Good thing I went to H&R Block for my taxes….