Jackson Hewitt Tax Service, the second-largest U.S. tax preparer, said it started an internal review of allegations against a franchise after the Justice Department said it would sue over the submission of fraudulent tax returns.

The review is being conducted by Fred Goldberg, a partner at the law firm Skadden Arps Slate Meagher & Flom, Parsippany-based Jackson Hewitt said in statement Thursday.

Jackson Hewitt spokeswoman Sheila Cort didn’t immediately return a call seeking comment.

Goldberg didn’t respond to a phone message left at his office in Washington, D.C.

The Justice Department on April 3 said it was suing Jackson Hewitt to shut 125 franchise offices after the IRS accused them of submitting thousands of fraudulent tax returns that cost the government more than $70 million.

The government said retail offices in Detroit, Atlanta, Chicago and Raleigh-Durham area of North Carolina took advantage of people of ”modest means.”

Jackson Hewitt said in an April 3 statement that the problems were limited to one franchise, or 125 locations of its more than 6,500 total.

Shares of Jackson Hewitt, down 16 percent this year, declined 41 cents, or 1.4 percent, to close at $28.70 on Thursday.

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Further Reading
U.S. Sues Five Jackson Hewitt Tax Franchise Firms
Budgetel names Tom Dunn director of franchise development in Southeast
Centax, Inc. Named Jackson Hewitt Tax Service Franchise of the Year
Franchise scam under investigation by SFO
Winner to be Announced in Valpak® and Liberty Tax Service $100,000 Tax Sweepstakes

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