IRS seeks to shut down 125 Jackson Hewitt offices

The United States Justice department says the company "preyed on people of modest means."

"The shops prepared more than 105,000 returns last year. All of them are partly owned by Farrukh Sohail of Atlanta, who was accused in court papers of creating a ''business environment'' where ''fraudulent tax return preparation is encouraged and flourishes.''

The tax preparers at Jackson Hewitt franchises were well trained: Managers at the franchises repeatedly told tax preparers that ''we are not the IRS'' and that it is not their responsibility to prevent customers from filing bogus returns. One example cited was a fuel tax credit amounting to the filer having to drive almost 1,400 miles a day. The company's shares plunged $5.87, or 18 percent, to $26.53 on Tuesday. Sohail was warned by Jackson Hewitt in 2005 that his Smart Tax/Jackson Hewitt stores were filing too many fraudulent returns, it still continued. I smell a whole slew of lawsuits, again.