DAR AL HARB - U.S.A.: TAX EVASION JIHAD WAGED BY ONE KNOWN AS FARRUKH SOHAIL

125 Jackson Hewitt offices face fraud suits
Associated Press

WASHINGTON -- The government said Tuesday that it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in four states for systematic "tax-fraud schemes."

In lawsuits filed in federal courts in Chicago, Atlanta, Detroit and Raleigh, N.C., 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., with more than 6,500 franchises, is the nation's second-largest tax preparer, after H&R Block Inc.A representative from Parsippany, N.J.-based Jackson Hewitt did not return a call seeking comment.

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.

Ron Brunson, Sohail's Birmingham, Ala.-based attorney, said his client would not voluntarily stop preparing tax returns at the Jackson Hewitt franchises, but was "hoping to work things out" with the Justice Department and IRS.

Sohail and other defendants "created, directed, fostered, and maintained a business environment" at the Jackson Hewitt franchises "in which fraudulent tax return preparation is encouraged and flourishes," according to court documents.

Employees allegedly 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.

The suits also allege that managers and employees at the Jackson Hewitt franchises took kickbacks for filing fraudulent returns.

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