JUDGE DECLINES TO DISMISS JACKSON HEWITT SUITNew York - A federal judge has turned down Jackson Hewitt's request to have a class-action lawsuit dismissed against the company and some of its franchises.

The plaintiffs, Dana Watts and Yadira Mosquera, alleged deceptive pricing practices in the sale of tax prep services at a Jackson Hewitt franchise in Brooklyn. They complained that they were deceived by misleading minimum prices and were overcharged by undisclosed fees hidden in their non-itemized bill.

The plaintiffs claimed that they and similarly situated customers were defrauded by the franchise's practices, which include an automatic 15 percent "multiplier fee" above the posted minimum fees. They complained that they were charged for the more expensive New York State long form despite their eligibility to file cheaper short form returns. They also said that Jackson Hewitt buried additional hidden fees for financial products such as refund anticipation loans and accelerated refund checks within the overall tax preparation fee when these fees ought to have been separately disclosed. Jackson Hewitt did not respond to a request for comment.

In their motion to dismiss, the Jackson Hewitt franchisees acknowledged charging the multiplier fee, but also pointed out several inaccuracies in the plaintiffs' itemization of their bills. However, the judge dismissed the franchisees' argument that they were covered by a disclaimer that appeared on their fliers.


Washington, D.C. - Average U.S. taxpayers subsidize corporate executive compensation by more than $20 billion per year, thanks to various tax and accounting loopholes, according to a new report.

The report, by the Institute of Policy Studies, cited preferential capital gains treatment of carried interest as one leading subsidy, which it estimated at an annual cost of $2.7 billion to taxpayers. Unlimited deferred compensation amounts to $80.6 million in taxpayer subsidies, according to the group. Offshore deferred compensation costs taxpayers $2.06 billion, and unlimited tax deductibility of executive pay amounts to $5.25 billion, while stock option accounting costs a whopping $10 billion.

The group cited Internal Revenue Service research showing that corporations claimed 2005 stock option tax deductions that were collectively $61 billion larger than the expenses shown on the company books.

The study, which was released before Fannie Mae and Freddie Mac were taken over by the government, also noted the outsize salaries of the CEOs of the beleaguered mortgage giants, and criticized the loose restrictions on salaries in an early bailout package. "The bill created a new regulator for the two mortgage firms and gives this regulator the authority to limit or withhold 'golden parachutes' and to ensure that executive pay levels are 'reasonable,'" said the report. "But the legislation does not define 'reasonable,' a decision that allows regulators considerable latitude."


Washington, D.C. - The Internal Revenue Service should make some changes in its software code to reduce delays in re-issuing some undelivered refund checks, a new report recommended.

When the post office determines that a tax refund check is undeliverable because the address to which the check was sent is not the taxpayer's current or correct address, the check is returned to the Financial Management Service, said the report from the Treasury Inspector General for Tax Administration.

The IRS then corresponds with the taxpayer to try to obtain a current address, even in some cases when the IRS already has an updated address on record for the taxpayer. This process delays receipt of the refund by the taxpayer, and the IRS generally does not pay interest to the taxpayer for the time required to get the refund check re-issued.

TIGTA estimated that over a five-year period, 73,795 taxpayers could be burdened by being asked to provide information that the IRS already has, and by having delivery of their refund checks delayed. Over the same period of time, the IRS could incur additional expenses of $36,160 to mail the unnecessary notices.

TIGTA recommended that the IRS revise its computer programming to automatically re-issue an undelivered refund check when an address change is reflected on a taxpayer's account between the date on which the check was originally issued and the date on which it is returned as undeliverable. IRS management agreed with the recommendation. A programming change was submitted on June 27, 2008, with a requested operational date of Jan. 15, 2010.

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