Montgomery Advertiser:  Cases may give tax preparer bill a boost

“A bill to regulate the state's tax preparer industry might have gotten a boost with the prosecution of five tax preparers and the indictment of a sixth on tax-related fraud charges last week.

“But even that might not be enough to dynamite the logjam in the House that could keep the bill from reaching the floor for full debate.

"The Middle District Court of Alabama recently announced the prosecution of four Montgomery residents and a Millbrook woman, and the indictment of a fifth man from Montgomery for tax‐related fraud, according to U.S. Attorney Leura G. Canary's office."

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Impact Alabama Work Featured in BusinessWeek Article

BusinessWeek: A Boom for Tax Prep

businessweek
As federal stimulus dollars begin to flow, one unlikely beneficiary is the $30 billion tax-preparation industry. Prep specialists from top dog H&R Block on down are celebrating as the Apr. 15 deadline approaches. The fresh treat: billions of dollars in new and expanded tax credits for individuals and small companies.

The good news for tax preparers could turn into bad news for the IRS, however, as well as an early illustration of what might be many unintended consequences stemming from the stimulus.

 UNDERCOVER WORK

On Jan. 12, an Impact Alabama volunteer visited a Jackson Hewitt outlet in Montgomery, the state's capital. Situated in a strip mall between a liquor store and swimming pool supply business, the Jackson Hewitt office has a sign in the window stating: "Confused about changing tax laws? We're not."

According to the transcript, a Jackson Hewitt employee told the undercover volunteer that she qualified for the EITC based on her occasional custody of two children. In fact, the supposed taxpayer should not have received a refund under the EITC because, as the volunteer made clear, neither child lived with her for the six months out of the year that the law requires.

The Jackson Hewitt employee prepared documents seeking what appears to have been an invalid $5,639 refund and charged a fee of $402, according to Impact Alabama. The nonprofit never filed for the refund.

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