West Virginia Takes Action Against JK Harris

JK Harris & Company, a South Carolina-based company that advertises that it can negotiate consumers' Internal Revenue Service (IRS) obligations and save them thousands of dollars, now faces contempt charges in West Virginia.

That state's attorney general, Darrell McGraw, has filed a petition charging the company and its owner, John Harris, are in violation of a 2008 consent order and injunction. That order permanently enjoined both JK Harris and John Harris from misrepresenting that consumers qualified or were eligible for Offers in Compromise (OICs) unless consumers actually qualified or were eligible.

An OIC is an agreement between the taxpayer and the IRS wherein the IRS agrees to accept far less than the taxpayer actually owes to settle a tax debt.

Many complaints

Many consumers complain that they have entered into multi-year relationships with JK Harris, paying thousands of dollars, but never getting anywhere with the IRS.

"There was a lack of communication on JK HARRIS' side with me," Thomas, of Union City, N.J., told ConsumerAffairs.com. " When I called my representative, I often didn't get a response. I was told by JK Harris that I was to communicate with the IRS, and the IRS said it was very unusual for this since JK HARRIS was representing me."

Kimberly, of Birmingham, Ala., claims the company "scammed" her.

"I've paid over $7000.00 for them to help settle my tax debt with the IRS and all they have done is shuffle my account around from person to person for the past three years," she told ConsumerAffairs.com. "In short, nothing has been accomplished or expedited. I recieved a call last week from them stating they could reactivate my account for a new discounted fee. "

Business as usual?

Since the entry of the consent judgment three years ago, McGraw says he has received complaints from consumers that JK Harris falsely represented to them that they qualified for OICs and charged them a hefty fee to negotiate an OIC on their behalf with the IRS. Some of the consumers did not discover they were ineligible for OICs until they received a notice from the IRS that their bank accounts were being garnished.

McGraw warns consumers to "be wary of companies running late night advertisements on television guaranteeing they get the IRS to reduce consumers' tax obligations. Three out of four times these promises are unfulfilled. IRS statistics show that only 25 percent of compromise applications are granted."

McGraw's petition asks the court to require JK Harris to stop misrepresenting the services it can offer, provide refunds to the consumers who were misled by the company, and enjoin JK Harris from advertising or conducting business in West Virginia until it has done so.

Two years ago Texas Attorney General Greg Abbott charged JK Harris & Company with misrepresenting their ability to help Texans resolve their unpaid tax obligations.

At the time, the state charged that 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 IRS, and accepted large, prepaid fees from customers whose tax liabilities the firm knew - or should have known - it could not reduce.