If you owe IRS taxes, you see all the claims about settling your tax debts for “pennies on the dollar.” It is possible to settle some people’s taxes for pennies on the dollar, but not many. My advice: be skeptical about claims, particularly from big or out of state firms. My office handles IRS tax collection defense, and I will give you the straight facts. For a no-charge appointment to meet with me about handling your IRS tax collection matter, call my office at 713-772-8037. To have it make sense to hire me to help you, you should probably owe at least $20,000 to the IRS.
Monday, April 13, 2009
Attorney General Abbott Charges JK Harris With Misrepresenting Its Ability To Reduce Unpaid Tax Debts
South Carolina firm’s advertisements overstated, misrepresented its tax resolution services
AUSTIN – Texas Attorney General Greg Abbott today charged JK Harris & Company, LLC, its owners and two related firms with materially misrepresenting their ability to help Texans resolve their unpaid tax obligations. According to the state’s enforcement action, JK Harris failed to provide promised services, misrepresented its employees’ professional skills and experience, overstated its ability to reduce debts that customers owe to the Internal Revenue Service, and accepted large, prepaid fees from customers whose tax liabilities the firm knew – or should have known – it could not reduce.
“The defendants are charged with unlawfully misrepresenting – and overstating – their ability to reduce unpaid debts that taxpayers owe to the IRS,” said Attorney General Greg Abbott. “Struggling Texans who paid large, upfront fees were told that their unpaid taxes could be resolved for pennies on the dollar. Today’s enforcement action seeks restitution for the defendants’ Texas customers and a court order enjoining the defendants’ unlawful conduct.”
JK Harris and related companies, LLC, JKH Financial Recovery Systems LLC, and Professional Fee Financing Associates, along with the firms’ owners, John K. Harris and Charles R. Harris, Jr., are all named defendants in the state’s enforcement action. Citing Texas Deceptive Trade Practices Act violations, the state is seeking an injunction, penalties, fees and restitution for the Texas-based JK Harris customers.
The defendants’ advertising and marketing materials claimed that JK Harris could settle customers’ unpaid tax obligations for pennies on the dollar. JK Harris typically charged $2,000 to $5,000 – paid in advance – for its tax resolution services, which largely relied upon the IRS’ Offer-in-Compromise (OIC) program.
According court documents filed by the state, the defendants charged customers without actually reviewing individual tax files to see whether individual taxpayers were eligible for relief through the OIC program – which is limited to very specific situations. The state’s investigation revealed that few of JK Harris’ customers qualified for OIC relief. Further, the defendants’ often failed to file their customers’ OIC application forms and frequently took no steps to reduce customers’ tax debts. When customers realized that JK Harris had undertaken little or no action, they frequently demanded refunds – and the defendants often failed to return the customers’ money.
The state’s enforcement action also cites the defendants for misleading customers about JK Harris’ regional employees’ qualifications. While the defendants’ advertisements claimed that former IRS agents, Certified Public Accountants, lawyers, and other professionals were “available to meet with consumers in 325 locations in 43 states,” investigators discovered that JK Harris’ regional offices are staffed by sales personnel – who are not trained tax experts. As a result, Texas customers who believed they could actually meet with JK Harris tax resolution experts in person were misled.
The Better Business Bureau and the Office of the Attorney General have received approximately 1,000 complaints against the company in the past 36 months. Texans considering tax resolution services should research a firm before entering into a contract or paying any fees.
Texans who need additional information, believe they have been harmed by a tax-assistance firm’s unlawful conduct or wish to file a complaint may contact the OAG at (800) 252-8011 or do so online at www.texasattorneygeneral.gov.