Jackson Hewitt franchises cited for bogus tax returns

WASHINGTON (AP) -- The government says it is trying to shut down more than 125 Jackson Hewitt tax preparation stores in North Carolina and three other states for systematic "tax-fraud schemes."

The Justice Department accuses the franchises of bilking the government out of more than $70 million through fraudulent practices. The government says the stores use phony W-2 forms, bogus deductions and fuel tax credits and false claims regarding the earned income tax credit.

Jackson Hewitt Tax Services is the nation's second largest tax preparer. The suits were filed in federal courts in Chicago, Atlanta, Detroit and Raleigh. They also allege that managers and employees at the Jackson Hewitt franchises took kickbacks for filing fraudulent returns.

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