You’ve heard me say in my posts titled “Pennies on the Dollar? . . . Buyer Beware” and “Offers In Compromise: Calculating Reasonable Collection Potential” that there are many so-called tax resolution companies that engage in misleading and in some cases outright fraudulent tactics.
Now, TaxProf blog reports that one of the worst offenders, J.K. Harris & Company, just settled a multi-million dollar lawsuit brought by eighteen states. North Carolina Attorney General Roy Cooper told the Wall Street Journal’s Tom Herman that,
Many consumers paid for tax help and got nothing but headaches in return. Now this firm has agreed to be upfront with people and pay them refunds if it can’t help them.
Massachusetts Attorney General Martha Coakley said J.K. Harris,
Took advantage of people who paid for tax assistance and, in some instances, profited by taking their money and not giving them any help at all.
In the last five years I estimate that I have had over fifty former J.K. Harris clients come into my office complaining that they were misled and that once they paid their fees the work was shipped to South Carolina and they never heard from anyone again. Unfortunately, this kind of unscrupulous behavior gives the good tax lawyers a bad name. Another notorious case is that of Roni Lynn Deutch. Listen to what the Wall Street Journal says about her,
JK Harris isn’t the only tax-resolution company that has faced consumer complaints. For example, New York City’s Department of Consumer Affairs said in late 2006 that the law firm of Roni Lynn Deutch of North Highlands, Calif., agreed to pay $300,000 to settle the city’s lawsuit alleging deceptive advertising of tax services. That included $200,000 for restitution to customers and $100,000 in fines to the city. An assistant to Ms. Deutch said Tuesday that Ms. Deutch couldn’t be reached to comment.
In 2004, the IRS, without naming any names, warned the public to beware of “unscrupulous promoters” preying on unsuspecting people in deep financial trouble. These promoters “make money by inappropriately advising indebted taxpayers to file an application for an offer in compromise with the IRS, promising unrealistic results, even when the taxpayers do not meet the requirements of the program,” the IRS said. “This bad advice costs taxpayers money and time.”
What is the moral of the story? Hire a local attorney who has experience in dealing with the IRS and who tells you what you need to hear, not what you want to hear. As the great American economist Milton Friedman famously said, “there are no free lunches.” And when it comes to the IRS, there aren’t even any free snacks.
Here is the entire Wall Street Journal Article titled Wiping Out Your Tax Debt Gets Tougher, by Tom Herman.
10 responses so far ↓
1 Taxpayer Beware: Tax Resolution Scams Abound // Apr 2, 2009 at 8:34 am
[...] my blog posts, “Pennies on the Dollar? . . . Buyer Beware and J.K. Harris Settles Fraud Charges with 18 States! for what to watch out for when being solicited by tax resolution [...]
2 auntb // Sep 21, 2009 at 10:41 am
Why don’t television stations and satellite, and cable providers actually check out predatory companies that make false claims in before they allow their commercials on the air? If they bothered to google JK Harris they would find humdreds of complaints.
The country is losing revenue to these cheaters and liars.
John Harris should be thrown in jail.
3 Joe Mastriano, CPA // Oct 6, 2009 at 12:09 am
For years I’ve been warning people to search for complaints before hiring a company to help resolve their tax problems. Also, to only hire a licensed CPA or Law firm. For more help choosing a responsible firm, please visit my site.
If you want valuable, FREE, information for dealing with the IRS yourself, or to check up on your current representative, please look under the “free advice” tab on the site.
4 Taxmasters, Inc. (Chubby Red-Bearded Guy on T.V.) Sued for Deceptive Trade Practices // May 14, 2010 at 6:08 pm
[...] In the last decade we have had at least 300 taxpayers hire us to clean up the mess created by dubious tax help outfits like Taxmasters and J.K. Harris. [...]
5 California Sues Roni Deutch for “Heartless” Pennies on the Dollar Tax Scheme // Aug 25, 2010 at 10:13 am
[...] [...]
6 leola savage // May 10, 2011 at 10:37 pm
Ive been had by JKHarris they took my money, instead of getting my levy removed IRS levy my disability monies,it’s hard for me to make ends meet now. Smething I shouldn’t did at the begain that is to deal with the IRS myself. Something has to be done to JKHarris, thet shouldn’t be aloud to do this to the poor or anyone.
7 “Tax Lady” Roni Deutch Gets Hit with $183K IRS Lien // Jun 4, 2011 at 10:20 am
[...] J.K. Harris – J.K. Harris Settles Fraud Charges with 18 States [...]
8 G // Jun 27, 2011 at 10:26 pm
I found JK and Harris in the yellow pages and thought they would be a good company to go with. That I would qualify for an Offer in Compromise. Then I decided to do a back ground check on them the day after I found out my copies of the agreement papers were pretty much blank, could not see or read anything. Then I started thinking why did he want me to fill out the paperwork that I didn’t\’t have any information about it and told me to guest how much everything was. And that he was in a big hurry for me to sign the money orders of $1025.00 over to him because he had to a flight to catch. I did a back ground check the day after and found out that they are scamming people all over the U.S. And cancelled them 2-3 days after I found all the information on them.
Damage Resulting = I canceled them the third day of being with them. I had to fax them a letter of cancellation letter the third day with them and another the fifth day again. Now they want to charge me initial processing and administrative fees (may comprise up to (25% of the total fee) and that these fees are non-refundable as of the fourth day of the contract. When I canceled them on the third day of the contract. And want me to sign a Receipt and General Release form. Which states all of JK & Harris Company is not to be reliable after I sign it? And only give me $769.00 of my money back instead of $1025.00. Which I am looking for an attorney to help me fight the case.
I have not received and thing back as of 6/27/11.
Do not sign anything else they send you. They will not return any of your money.
If you have been scammed contact your news media, attorney general and hire an attorney.
9 Toff // Aug 18, 2011 at 5:57 pm
Unfortunately, Both of those companies are still going strong despite everything surrounding them.
10 Peter // Aug 18, 2011 at 6:04 pm
Toff,
No doubt. We could do that well, too, if we didn’t have souls.
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