Jackson Hewitt Class Action Says Company Takes Fraudulently Claimed Tax Refunds

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A California man claims a Jackson Hewitt franchisee has been appropriating his identity to claim fraudulent refunds from the IRS.

Plaintiff Luis Lomeli claims that over the past three tax years, a Jackson Hewitt location in South Gate, California has been manipulating his tax returns and siphoning off the resulting fraudulent refunds.

He is suing Jackson Hewitt Inc. and a group of related businesses, bringing claims of fraud, conspiracy and negligence under federal and state law.

According to this Jackson Hewitt class action lawsuit, Lomeli discovered the trouble in 2017, when he compared his 2014 tax return to the IRS transcripts for that return. Lomeli found the return Jackson Hewitt actually submitted to the IRS was different from the one he had authorized Jackson Hewitt to submit.

He claims the return Jackson Hewitt actually submitted listed hundreds of thousands of dollars in business-related expenses he never meant to claim. Claiming these expenses reduced Lomeli’s tax liability by tens of thousands of dollars, resulting in a nearly $6,000 refund.

Lomeli says he never received that refund. In fact, he says, he didn’t know the refund existed until he reviewed his returns in 2017. He claims that at the time of filing in April 2015, Jackson Hewitt told him he was not owed any refund.

The plaintiff says he made similar findings upon reviewing his 2015 return. That year’s filing resulted in thousands of dollars in refunds he never saw. He alleges Jackson Hewitt issued that refund as a cashier’s check, then forged his signature in an endorsement on the check to collect the funds.

Jackson Hewitt did deliver Lomeli a refund after filing his 2016 taxes, he says – but not without taking out an “additional, undisclosed, and unearned” fee of $330. Around that time, he discovered an account had been opened in his name with defendant Civista Bank, the bank that handles funds related to Jackson Hewitt’s “Assisted Refund” program.

Lomeli is proposing to bring these claims on behalf of two plaintiff Classes. The “Manipulated Return” Class would cover all persons in the U.S. whose tax returns Jackson Hewitt altered to create an artificial refund. The “Undisclosed Fee” Class would cover all persons whom Jackson Hewitt charged undisclosed fees as part of its Assisted Refund program.

The plaintiff believes Jackson Hewitt may have been committing the alleged scheme against hundreds of thousands of its tax preparation customers. Among other claims, he is raising allegations of conspiracy under the federal Racketeer Influenced and Corrupt Organizations Act, or RICO.

He seeks a court injunction barring Jackson Hewitt from continuing the practices complained of here. He also seeks an award of damages, equitable relief, and reimbursement of court costs and attorneys’ fees.

Lomeli is represented by attorneys Paul A. Traina and Ian P. Samson of Engstrom Lipscomb & Lack, and Dylan Ruga and Ji-In Lee Houck of Stalwart Law Group.

The Jackson Hewitt Tax Fraud Class Action Lawsuit is Luis Lomeli v. Jackson Hewitt Inc., et al., Case No. 2:17-cv-2899, in the U.S. District Court for the Central District of California.

UPDATE: On Oct. 19, 2017, a California federal judge dismissed a class action lawsuit that accused a Jackson Hewitt Inc. and Tax Services of America Inc. franchisee of manipulating customers’ tax returns and keeping the resulting fraudulent tax refund. However, the judge will allow the plaintiffs to file an amended complaint.