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May 14, 2012
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Taxation Legal News

 


U.S. Government Sues Jackson Hewitt Tax Preparation Franchises, Alleging Pervasive Fraud

The United States has filed civil injunction suits against five corporations that operate Jackson Hewitt tax preparation franchises, as well as 24 individuals who manage or work at the franchises, the Justice Department and the Internal Revenue Service (IRS) announced today. According to the four lawsuits—filed in federal courts in Chicago, Atlanta, Detroit and Raleigh, N.C.—the corporations operate under franchise agreements with Jackson Hewitt Tax Services Inc. of Parsippany, N.J., the nation’s second largest tax preparation firm.

The suits allege that one of the individual defendants, Farrukh Sohail of Atlanta, Ga., wholly or partly owns each of the five corporations, which prepared and filed over 105,000 federal income tax returns last year. The five corporations allegedly operate more than 125 Jackson Hewitt retail tax preparation stores in the Chicago, Atlanta, Detroit and Raleigh-Durham, N.C. areas.

According to the government complaint, Sohail and other defendants “created and fostered a business environment” at the Jackson Hewitt franchises “in which fraudulent tax return preparation is encouraged and flourishes.” Examples of fraud alleged in the lawsuits include filing false returns claiming refunds based on phony W-2 forms; using fabricated businesses and business expenses on returns to claim bogus deductions; claiming fuel tax credits in absurd amounts for customers clearly not entitled to any credits; and massive fraud related to claiming the federal earned income tax credit. Read more at usdoj.gov.

 

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Did You Know?    
 
 
There are tax rules if change in accounting method is made
Generally, the partnership must get IRS consent to change its method of accounting used to report income (for income as a whole or for any material item). To do so, it must file Form 3115, Application for Change in Accounting Method. See Form 3115 and Pub. 538, Accounting Periods and Methods.

 


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News about Taxation cases in Miami and nationwide:

Is Estate Tax Reform Dead?
WASHINGTON, D.C. - Senate Republicans' attempt to push through a permanent cut in the estate tax before adjourning was nothing short of a...
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IRS Collects $3.2 Billion from Son of Boss; Final Figure Should Top $3.5 Billion
WASHINGTON — The Internal Revenue Service announced today that taxpayers participating in the Son of Boss tax shelter settlement have so far paid i...
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Tax Commissioner Announces Partnership With Other States In Combating Abusive Tax Avoidance Transactions
RICHMOND, VA - Tax Commissioner Kenneth W. Thorson signed a Memorandum of Understanding (MOU) between Virginia TAX ...
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Taxation Terms

 


Today's Terms

Subchapter S

Definition:
The S-Corporation must complete and file IRS Form 1120s to report its annual income to the IRS each year.

Dependent

Definition:
A person, other than the taxpayer or spouse, who entitles the taxpayer to claim a dependency exemption.

Income taxes

Definition:
Taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends). Income taxes can be levied on both individuals (personal income taxes) and businesses (business and corporate income taxes).

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Tax Legal Resources

 


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Taxation Hot Topics

 
Topics Related to Taxation Law:
  • Income Tax Cases
  • Recent Estate & Gift Tax Cases
  • Recent Income Tax Cases
  • State Statutes Dealing with Taxation

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Miami Taxation Attorney

 
If you live in the following cities and need an taxation attorney you should contact our Taxation Attorney as soon as possible:

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