WASHINGTON - Alleging pervasive fraud, the government has filed civil injunction suits against five corporations that operate Jackson Hewitt tax prep franchises, as well as 24 individuals who manage or work at the franchises, the Justice Department and the Internal Revenue Service announced.

Collectively, the suits allege that the businesses cost more than $70 million in losses to the U.S. Treasury.

One of the defendants, Farrukh Sohail of Atlanta, wholly or partly owns each of the five corporations. Those businesses operated more than 125 Jackson Hewitt retail stores in the Chicago, Atlanta, Detroit and Raleigh-Durham areas - preparing and filing more than 105,000 federal income tax returns last year. The lawsuits also accuse some of the franchises' managers and employees of receiving kickbacks from customers for helping file fraudulent tax returns.


WASHINGTON - The Public Company Accounting Oversight Board released a new auditing standard, along with guidance targeting how tax services are provided to people in financial reporting oversight roles. The board is now soliciting public comment during a 45-day review period.

The audit standard would update and clarify auditor responsibilities when it comes to evaluating and reporting on matters relating to the consistency of financial statements. The clarifications would also enhance auditor reporting on accounting changes and corrections of misstatements by clearly distinguishing between those events. The board also released a proposal addressing Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles, and new guidance addressing both that rule and Rule 3522, Tax Transactions.

The text of the proposals is available at www.pcaob.org.

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