MEMPHIS, TN (WMC) - It's the quintessential tax-season David-vs-Goliath story, tinged with forgery, fraud, and fuzzy math. Just as the Goliath of the Bible lost his battle, so did this 'Goliath.'
This 'Goliath' is Jackson Hewitt Tax Service, more specifically its U of M area location at 3449 Park Avenue. Usef Simmons of Arlington, Tennessee, sued the national tax-prep company last September, alleging "breach of contract...fraud, misrepresentations...and other reckless and/or negligent actions" in the preparation of his 2012 tax return. The actions caused discrepancies that triggered an IRS audit in 2015, costing Simmons about $8,000 in penalties and interest.
Shelby County General Sessions Judge Deborah Henderson ruled in favor of Simmons and awarded him a $24,999 judgment last November, according to the judgment warrant. The company actually ended up paying Simmons $25,249 to include interest earned over the four months that have passed since the judgment.
The court issued the judgment on the weight of documented evidence of Jackson Hewitt's fraud, starting with what triggered the IRS audit. According to Simmons' tax documents, Jackson Hewitt tax-preparer Rose Mangrum listed Simmons' 2012 medical expenses in the amount of $16,789. The receipts Simmons submitted as part of the IRS exam indicated his medical expenses that year were actually $382. "I'm retired military," Simmons said. "Most of my medical expenses are covered."
His 2012 charitable contributions also caught the eye of an IRS auditor. Simmons' actual charitable contributions that year -- all cash donations to his church -- were $1,378, according to receipts he submitted to the audit. Mangrum submitted his 2012 return to the IRS with his listed contributions to his church as $15,008.
"Not $15,000! Not to my church!" Simmons said as he laughed at my suggestion that he would have been named a bishop in the church for such a gift.
Simmons hired the Nashville law firm Merritt, Webb, Wilson & Caruso, PLLC to review his 2012 return and receipts. In a letter dated May 10, 2016, to Mangrum, the firm's Valerie L. Dance wrote "...you grossly overstated items on Mr. Simmons' tax return, including his charitable contributions and medical expenses, despite Mr. Simmons providing receipts to you for these items reflecting his actual expenses."
It gets worse.
Simmons showed me his signature on his 2011 tax return's electronic filing authorization form, the one the year before Jackson Hewitt prepared the audited return. "That's my signature," he said.
Then he showed me the 2012 e-file form, the one for the return the IRS audited. It is blatantly obvious that it's a different signature. "That is not my signature," he said. "It's been forged."
"Jackson Hewitt engaged in outright forgery, outright fraud," said Kevin Snider, certified fraud examiner and Simmons' Memphis attorney. "Imagine anyone else doing that. They would be in jail."
Snider said the company's lawyers had spent the last months trying to negotiate a smaller judgment in spite of the court order. "Their position is they don't think they should have to pay the full judgment," said Snider.
I emailed Jackson Hewitt's Deputy General Counsel Gary Weinstein. I asked him why the company hasn't made good on the judgment and why one of its employees would submit false and fraudulent information on a client's tax return, ultimately triggering an audit that cost the client thousands of dollars. He didn't respond.
Instead, the company's public relations firm out of St. Louis replied with a single statement attributed to Jackson Hewitt Tax Service: "We are sorry this occurred. We always stood ready to make things right and worked in good faith with Mr. Simmons to find a resolution that went well beyond our guarantee to pay his penalties and interest. Jackson Hewitt immediately investigated Mr. Simmons's complaint when we learned of it. We stand by our accuracy guarantee, and we were always committed to fixing Mr. Simmons's issue. In fact, Jackson Hewitt had been working in good faith with Mr. Simmons and his different sets of lawyers. We are pleased to say that we have resolved this matter to the satisfaction of our customer."
Within a week of my call, Jackson Hewitt had cut Simmons his check for 25-grand plus interest. "I appreciate everything you did to help get this resolved," Simmons said.
An employee at the Jackson Hewitt office where Mangrum prepared Simmons' return said Mangrum was no longer employed by the company. Reached at her home in Whitehaven, Mangrum said she left the company on her own terms. She also said she stands by her work on his return. "The court was on (Simmons') side because Jackson Hewitt missed the court date," she said. "That return was not fraudulent. Everything he gave me was put on that return accurately."