Friday, January 23, 2009

Does Jackson Hewitt's Claim Comply With the Law?

9 out of 10 customers receive a refund, according to Magic Johnson. I'm not sure if that claim is accurate. It may, though, be in violation of the law.

According to Reg. §301.7216, tax return preparers are generally not allowed to disclose tax return information even in a statistically compiled manner that would not identify any taxpayers directly. The limited purposes for which disclosure may be made are compliance with financial accounting or regulatory reporting requirements. It also allows for anonymous disclosure in the attempt to sell the tax return preparation business.

In 2009, there is some temporary guidance that eases some of the restrictions. It still prohibits disclosing information related to refund, credit, or rebate amounts, or a part thereof, for purposes of advertising or marketing.

How does Jackson Hewitt's pitch fit within the guidelines? My guess is the company will be forced to stop airing the ads, but no other sanctions will be imposed.

The only thing I am sure of is this: 9 out of 10 Jackson Hewitt customers are so bad at math they give the government an interest free loan!

Wednesday, January 21, 2009

If 9 Out Of 10 Jackson Hewitt Customers Receive a Refund, Do 9 out of 10 Jackson Hewitt Preparers Receive an Indictment?

Magic Johnson has been peddling the services of Jackson Hewitt this season. The ads claim 9 out of 10 customers receive a refund. The ad doesn't mention the Department of Justice's investigation into tax fraud of any of its franchise operators.