JACKSON HEWITT SAYS IT WAS CLEAR OF FRAUDPARSIPPANY, N.J. - Jackson Hewitt Tax Service said that it has completed its internal review of fraud allegations by the Justice Department against several of its franchisees, and said that its corporate employees were not involved.
The review, led by former Internal Revenue Service Commissioner Fred Goldberg Jr., did not find evidence of the tax prep chain's corporate employees participating in or knowing about the fraudulent activities.
After the internal review, the tax prep chain said that it would develop monitoring tools, increase the training of its franchisees and preparers, and educate its customers better about the Earned Income Tax Credit.
The company is taking a charge of $6 million for the costs of the internal review.
REZNICK TO ACQUIRE TIDWELL DEWITT
ATLANTA - The Reznick Group said that it has signed a letter of intent to acquire Tidwell DeWitt, building its presence in the Southeast and adding more services.
The move will expand Reznick's Atlanta office and establish a new office in Birmingham, Ala., for the Bethesda, Md.-based firm. Approximately 50 Tidwell DeWitt employees, including seven principals, will join the Reznick Group. Tidwell DeWitt had annual revenue of $13.7 million in fiscal 2006, while Reznick Group had annual revenue of $188 million. Reznick sees the Birmingham expansion as a natural fit because of the city's proximity to Atlanta.
DEFENDANT IN KPMG CASE PLEADS GUILTY
NEW YORK - David Amir Makov, one of the remaining defendants in the KPMG tax shelter case, pleaded guilty in Federal District Court in Manhattan to one count of conspiracy to commit tax fraud and agreed to cooperate with prosecutors.
Makov described in a statement the work he did as an investment advisor at Presidio Advisory Services, which helped KPMG and a bank set up bogus tax shelters. Makov also implicated two other principals at Presidio, John Larson and Robert Pfaff. They are set to go on trial next month.
The judge overseeing the case, Lewis A. Kaplan, dismissed charges in July against 13 of the defendants, most of them from KPMG. Nineteen people were indicted in 2005. One pled guilty in 2006 and agreed to cooperate with prosecutors. Makov agreed to forfeit $10 million as part of his guilty plea, and still awaits sentencing.
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