Tax pros, cheats and amateurs.
WASHINGTON - The government said Tuesday it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in four states for systematic "tax-fraud schemes."Disclosure- TFM has prepared taxes on a part-time basis since 1989. I'm a former H&R Block employee. The last time I worked for the company was in 2002.
The Justice Department accuses the franchises of bilking the government out of more than $70 million through fraudulent practices such as using phony W-2 forms, bogus deductions and fuel tax credits and false claims regarding the earned income tax credit.
Jackson Hewitt Tax Services Inc. is the nation's second largest tax preparer. The franchises were either totally or partially owned by Farrukh Sohail, the Justice Department said, and involved "a pervasive and massive series of tax-fraud schemes," according to court filings.
Employees were encouraged to ignore telltale signs of fraudulent information and to file claims even when it was obvious customers were using fake W-2 forms or false deductions.
A sample of returns prepared by franchises connected to Sohail found 31 percent contained false information such as phony earned income tax credit claims, bogus deductions and fraudulent W-2 forms.
This is the biggest case of tax cheating I've ever seen by a tax preperation firm. Jackson Hewitt, unlike Block, sells franchises. There are unscrupulous people in all professions, this news shouldn't be considered alarming.
James Joyner at OTB says 'just another sign that you probably shouldn’t be paying amateurs to prepare your taxes.' If one either feels incapable of doing their own taxes or is just too lazy, firms like Block are the best choice. A Block preparer will cost you one fourth what professionals like a CPA will charge and your return will be done just as properly. Block has a variety of experienced preparers in their offices, it was my experience that if a preparer got a customer whose return was beyond their expertise, they'd hand it off to someone who could. Only the most complicated of returns require a tax professional. We amateurs can do just as good a work.
Linked to- Big Dog, Pirate's Cove, Random Yak,