Jackson Hewitt has already suffered falling stock prices due to proposed restrictions on refund anticipation loans, as has H&R Block. Now there is a new twist.
In 2007, 34 Jackson Hewitt outlets near Raleigh, NC were temporarily closed due to filing fraudulent returns. It turns out that there were 125 total locations across four states that were shuttered for the last 2 weeks of the tax season. There are signs of more problems.
Jackson Hewitt is facing a myriad of lawsuits from the US Justice Department and several state regulators. Indications are that a class action lawsuit is also gaining momentum.
Jackson Hewitt previously paid a $150,000 fine to the NC Office of the Commissioner of Banks for pre-file loan violations. Known as pay stub RALs, these extend the time that interest is earned from the last paycheck of the year, rather than from the time the W-2 is actually received by the client and the return is filed.
The announcement by the Internal Revenue Service could severely hinder the ability of Jackson Hewitt and other tax preparers from profiting from the vulnerability of lower income taxpayers. Consumer advocates encourage the news. Why should they pay a fortune for tax filing when it is available for free?
What most low income taxpayers do not know is that not only can they get their taxes prepared for free, that they can also have their returns electronically filed at no charge. Their refunds can be direct deposited in their account in about 10 days. All of this is free through the IRS Volunteer Income Tax Assistance program.
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