CHARLESTON, W. Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw announced a settlement Monday with a South Carolina tax resolution firm for victims of allegedly bogus tax compromise services.
An agreed order was entered into in the circuit court of Kanawha County with JK Harris & Company and its owner, John Harris. The company advertises nationally that it can negotiate consumers' IRS obligations and save them thousands of dollars.
After McGraw obtained a June 2008 consent order to halt similar practices by the company, he obtained additional complaints by those who had allegedly been told by JK Harris that they qualified for an "Offer in Compromise" only to later discover they did not. Consumers who do qualify for the OIC program have most of their tax liability waived and only pay a percentage of what they owe to the IRS. However, the IRS only accepts less than 25 percent of the OIC applications it receives.
The settlement resolves this and other issues raised in the state's petition for contempt filed by McGraw on March 31 and provides for refunds for affected customers.
"There are many tax settlement scams being advertised on late night television," McGraw said. "It is always best to get an opinion from a local tax consultant before responding to these commercials."
In the previous consent order, JK Harris agreed to stop falsely representing to ineligible consumers that they qualified for an OIC with the IRS and to stop charging consumers and fees to apply for the OIC program unless the company could demonstrate the consumers were eligible. Since the 2008 settlement, McGraw received complaints from four consumers who paid fees to Harris after they were told by the company they qualified for OICs but actually did not.
Under the settlement, JK Harris will provide these consumers with full refunds totaling $14,180.00. Consumers who paid JK Harris money to obtain an OIC for them and did not qualify for the program can file complaints and will be eligible for refunds by Aug. 26.