In Wake of Charges, Jackson Hewitt to Launch Own Review

A former Internal Revenue Service commissioner will head up Jackson Hewitt Tax Service Inc.’s internal review of fraud charges lodged last week against a major franchisee.Last week, the nation’s No. 2 tax preparer announced that Fred Goldberg, currently a partner at the Washington law firm Skadden, Arps, Slate, Meagher & Flom LLP, would lead a review of charges brought by the Department of Justice. Goldberg served as IRS commissioner for three years, before returning to private practice with Skadden Arps in late 1992. That same year, he also served a stint as assistant secretary of the Treasury for Tax Policy.

"Jackson Hewitt takes allegations against our franchisees seriously," said Jackson Hewitt president and chief executive Michael Lister, in a statement. "We intend to identify all of the facts related to these allegations and address them appropriately.”

According to the government injunction, a handful of corporations operating more than 125 Jackson Hewitt locations in Atlanta, Chicago, Detroit and Raleigh-Durham, N.C.. cost losses of more than $70 million to the U.S. Treasury in recent years. The government’s suit named Farrukh Sohail, who either wholly owns, or has a partial stake, in each of those corporations. The government alleges that the franchises routinely…

Lister said that the review would also examine franchise practices and procedures and make any recommendations that should be implemented company-wide. Jackson Hewitt Tax Service Inc. has more than 6,500 franchised and company-owned offices in the United States. Most offices are independently owned and operated.

In recent years, Goldberg’s practice has focused on advising clients as special tax counsel and representing clients on tax controversies, IRS administrative and regulatory proceedings, and tax legislation.

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