Even with the accounting issues, states switching to the modernized efiling platform  and the delayed start to tax season, JTH grew market share, increasing the number of customers served during fiscal 2013 by 4 percent, according to CEO John Hewitt.

The most notable changes in the restatement of fiscal results were that last year's net income was reported a $16.4 million, instead of $17.4 million, while revenue was noticeably higher at $131.2 million, compared to the $109.1 million as originally filed. The company ended fiscal 2013 with net income of $17.6 million on revenue of $147.6 million, meaning that the restatement gave it a bigger increase in earnings than would have been reported without going through the process.

The issues that gummed up the process were accounting for revenue from Area Developer Arrangements and Territory Franchise Fees. The first are no longer lumped into franchise sales and are now recognized over the term of the relationship rather than at the beginning. The company must record gross revenue in the area developer portion of the franchise fees, interest and royalties and recognize a corresponding and equal expense for the amount due to the area developer. Similarly, franchisee fee income is now recorded as payments are made, not upfront.

In acquiring the businesses franchises, JTH allocates the purchase price to all identifiable intangible assets in contrast with allocating the entire purchase price was allocated to customer lists.