IRS Investigates Jackson Hewitt Further

The IRS investigation into Jackson Hewitt’s malpractices has deepened, NYT reports:

The lawsuits filed against the Sohail-owned or controlled franchises said that employees had been pushed to crank out returns in exchange for bribes, to accept scant or false documents, like W-2 forms, and to falsify taxpayer data to receive the earned-income tax credit, a federal assistance program.

And that’s why we like accountants. Not only will a good one help you find deductions, they also know enough to not do stupid stuff. It’s you, not the tax form preparer, on the hook if you file a fraudulent return. — BEN POPKEN

Inquiry Into Jackson Hewitt’s Tax Return Practices Widens [NYT]
(Photo: Meghann Marco)

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  1. FreemanB says:

    My wife is a CPA. She sees returns prepared by places like these all the time, and they are full of mistakes. Sometimes in the customer’s favor, and other times in the IRS’s favor.(One you lose money, one you risk criminal prosecution. Fun choices) Her advice is that if you can’t do your taxes yourself(Either with just the forms or with the help of tax software), then you should pay a professional to have it done. It may cost more up front(It doesn’t always), but you’ll have some assurance that it is accurate.

  2. Chicago7 says:

    Of course that’s her advice. That’s how she makes her money. If you have something truly complicated, go to an accountant. Most of the people who go to Hewitt-Jackson or H & R Block can’t figure out their taxes, but they don’t really have a complicated enough tax problem to involve a $50-100/hr. accountant.

    I would guess that the accuracy rate of tax services is HIGHER than the accuracy rate of independent accountants.

  3. zolielo says:

    I do my own tax returns but I am a highly skilled economist. ;)

    However, I do suggest H & R Block to others for if they are incorrect they have a moderate guarantee.

  4. FreemanB says:

    @Chicago7:
    Actually, she’s not working currently, since she’s attending law school. She would also recommend things like TurboTax to people with simple returns. She would only recommend a professional accountant to those who had some reason not to use TurboTax.(She was on a salary, so she didn’t benefit from more customers anyway) Most smaller firms charge you a flat fee, based on an estimate of the complexity of your return. H&R Block isn’t too bad, but you have to be careful with how much you pay there. Since they charge for each form you use, you can often end up paying them more than a traditional accountant would charge you.