Summertime may not be the season most people associate with taxes and tax preparers, but the IRS and Department of Justice are both reported to be examining Jackson Hewitt, the nation's #2 tax preparer.
Hewitt is not a target of the Justice Department's case, which centers on one of its larger franchisees. Meanwhile, the company disclosed that the IRS was examining Jackson Hewitt's corporate situation.
At the beginning of 2007, we reported that California had reached a settlement with the company. Sometimes, it doesn't rain, but it pours. Hewitt, which has long chased H&R Block (a company with its own share of troubles) has over 6,000 locations in the nation, but about 80% of those are owned by franchisees.
The company continues to book solid, if unspectacular, growth and the stock's beta and pricing are as steady as one could hope for when looking at investments. Even the dividend keeps rising, but the company concedes in official filings that adverse publicity can impact revenue. Meanwhile, the results of the Justice Department's investigation may find that the consistency of preparation and offering of additional services for sale may vary widely between franchisees, creating a shopping issue for consumers.
As with all major chain preparers, consumers should thoroughly investigate the branch they are visiting, not necessarily the headquarters company. That is good advice whether you are eating at McDonald's, sleeping in a Marriott hotel or having your taxes down by a household name. One simple call to your local (or state) consumer affairs agency should provide you with the information you need. Be sure to call Consumer Affairs instead of a business-sponsored organization like the BBB that has no regulatory authority and cannot compel a company to change its business practices or even respond to complaints.
Labels: Jackson Hewitt, taxes
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