JK Harris Charged by Texas AG’s office with Misrepresenting Its Ability to Reduce Unpaid Tax Debts

13 Apr JK Harris Charged by Texas AG’s office with Misrepresenting Its Ability to Reduce Unpaid Tax Debts

Texas Attorney General, Greg Abbott, charged JK Harris & Company, LLC, its owners and two related firms (JKH Financial Recovery Systems LLC and Professional Fee Financing Associates) today with “materially misrepresenting their ability to help Texans resolve their unpaid tax obligations.” The state enforcement action alleges JK Harris failed to provide promised services, misrepresented its employees’ profession skills and expertise, 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 firms knew – or should have known – they could not reduce.

Attorney General Abbott said “the defendants are charged with unlawfully misrepresenting – and overstating- their ability to reduce unpaid debts that taxpayers owe to the IRS. Mr. Abbott went on to say “{s}truggling 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.”

Texas 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 to court documents, 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. Texas’ investigation revealed that few of JK Harris’ customers qualified for OIC relief. Further, JK Harris and the other 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 taken little or no action and demanded refunds of the fees they had paid, the defendants often failed to return the customers’ money.

Court documents also allege the defendants mislead 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,” Texas investigators discovered that JK Harris regional offices were staffed by sales personnel who are not trained tax experts. Thus, resulting in Texas customers being misled.

Texans who believe they have been harmed by a tax-assistance firm’s unlawful conduct or wish to file a complaint may contact the Texas OAG at 800-252-8011 or online at www.texasattorneygeneral.gov.

Related Posts Plugin for WordPress, Blogger...
The following two tabs change content below.
Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
No Comments

Sorry, the comment form is closed at this time.