NASHVILLE, Tenn. (Legal Newsline) - Tennessee Attorney General Robert Cooper announced on Tuesday that a civil contempt order and permanent injunction have been secured against a tax preparer and its co-defendants that didn't abide by terms of a 2008 agreement.
Tax preparer JK Harris and its co-defendants allegedly failed to abide by a 2008 agreement that provided consumers with refunds and required penalties for alleged misleading advertising.
Under the new order, JK Harris and its co-defednants will pay 11 consumers $35,522 in restitution or possibly face more severe legal consequences. Williamson County Chancellor James G. Martin, III, also ordered civil contempt penalties at a rate of $650 per day until the defendants come into compliance with the order and civil penalties of $26,000. Additionally, the defendants were ordered to pay all costs incurred by the state after being found in violation of 13 counts of civil contempt.
"We are gratified Chancellor Martin took quick action to help resolve this continuing and expensive problem," Cooper said. "I appreciate the consumers who came forward to attend and testify at the hearing, and I want them to know we will continue to monitor this case and continue to take action like this when companiesdo not comply with court orders."
According to the court, JK Harris and its co-defendants were not truthful in their advertising, allegedly claiming that their tax debt-reduction services could be provided by veteran ex-IRS agents, CPAs, lawyers, enrolled agents, and tax, financial, and small business professionals.
Additionally, the court found that the defendants were in contempt for misrepresenting to consumers that they were qualified for the IRS Offer In Compromise program when they were not. The company, however, continued accepting payment from consumers who were not qualified for the program, the court determined.
JKK Harris advertised that it had more than 450 offices nationwide, including six locations in Tennessee - Brentwood, Chattanooga, Jackson, Johnson City, Knoxville and Memphis. The main office in North Charleston, S.C., however, was the only office that handled consumers' files. The other offices were staffed by sales representatives.