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Texas Attorney General's Office reaches settlement with tax company

April 6, 2011 9:49:09 AM PDT
Tax day is nearly here, and the state attorney general just reached a settlement with one of the largest tax companies, which changes the way they do business. The settlement against JK Harris also sets aside nearly $1 million to clients who say the company did nothing for them. The case against JK Harris dates back to 2009. Since then the attorney general and the company have been negotiating the terms of the settlement. The company admits no liability in the case, but it must change its practices.

When Lupe Carrillo found himself owing the IRS $25,000 in back taxes he says he called JK Harris for help.

Carrillo said, "I indeed paid up front thousands of dollars to JK Harris and followed their advice not to contact the IRS."

Carrillo says as months went by, IRS notices kept coming and getting in touch with JK Harris kept getting harder.

"I could not get in touch with anyone who was actively working on my case with JK Harris," he said.

Finally Carrillo says he called the IRS himself and learned little had been done to resolve his tax problem.

Carrillo explained, "It took just a short conversation with the IRS to come to a resolution."

Texas Attorney General Greg Abbott announced a settlement with JK Harris that sets aside $800,000 to refund clients like Carrillo who say the company did nothing for them as well.

"Our investigations found that JK Harris charged customers thousands of dollars up front without actually reviewing individual tax files to see whether taxpayers were actually eligible for the relief they were seeking," Abbott explained.

The settlement goes on to say JK Harris must tell clients the company's success rate in getting the IRS to accept less money than is owed by a taxpayer. The AG's office says out of 3,300 JK Harris clients it contacted, only 157 got such offers, adding more than 2,000 clients paid for services they never received.

Abbott said, "JK Harris simply failed to fill out the documents that were necessary in order to qualify their customers for the program."

We contacted JK Harris and a spokesperson send us a statement regarding the agreement with the Texas Attorney General. Click here to read the full statement.

With the tax filing deadline right around the corner, if people find themselves owing back taxes or lots of money to the IRS, they are advised to call the IRS directly. The attorney general told us the IRS compromise offers can be gotten by any taxpayer who qualifies. The Texas Attorney General's Office has a list of people they feel should be involved in the JK Harris settlement, but they say that list may be incomplete. If you were a client of JK Harris over the last couple of years and you feel like this affects you as well, and you have not been contact by the attorney general's office, you're urged to contact the AG's office yourself so they can investigate.


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