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.

2 comments:

Anonymous said...

You also forgot to add that all DOJ charges were dropped against the operator, or did you forget to read that on the last page of your newspaper in a very teeny column when it occurred? Facts DUDE, or are you a rumor monger?

Dave McFarland, CPA said...

Lila,

I didn't forget to add that fact. It was irrelevant for the purposes of this post. The operator WAS in fact indicted. The operator was barred from preparing tax returns. I suppose you could argue that the operator did nothing wrong and just wanted to change careers, but the most likely interpretation is that the serious charges were not pursued in exchange for the operator not being allowed to prepare tax returns.

At any rate, I would be a worried wreck if my tax preparer were facing fraud and racketeering charges. The DOJ can and has gone after individual clients of charged tax preparers.

You, however, failed to mention that of the Detroit operators, 4 entered a guilty plea and 3 were convicted in court.

Also not discussed (I plan to post an entry today) is the fact that many professional CPA groups are claiming the ads may be in violation of the law. For Jackson Hewitt to claim 9 out of 10 of their clients receive refunds, JH must be collecting data from tax returns. Even though JH isn't disclosing clients by name, they are disclosing client information. A strict reading of the disclosure consent rules would lead one to believe that this ads violates the law.

Thanks for reading.

-Dave