JK Harris Overstated Benefits, Ordered to Pay Restitution in Texas

JK Harris failed to provide promised services. They overstated their ability to reduce taxpayers’ debts owed to the Internal Revenue Service. They accepted large prepaid fees from customers even though they knew or should have known that their tax liabilities would not be eligible for a reduction.

Those are the claims made by Texas Attorney General Greg Abbott following a lengthy investigation that cost the state $400,000. Now JK Harris has been ordered to reimburse the state for those investigative costs.

The state has ordered JK Harris to provide restitution to its Texas customers. A settlement was agreed upon which has JK Harris paying $800,000 in restitution.

Attorney General Greg Abbott released the following statement:

“Under the court order, JK Harris and its related companies must reform the way it does business – and provide restitution to Texas taxpayers who were harmed by the defendants’ unlawful conduct. Taxpayers from across the state complained to the Attorney General’s Office about the defendants’ misconduct. The agreement seeks to resolve past problems, reimburse Texans who paid for services that were not actually rendered, and prevent additional misconduct in the future.”

JK Harris has been ordered to change its solicitation practices. Clients must now receive written disclosures that explain how rare and Offer in Compromise actually is, and that most clients will not qualify for the program.

The investigation concluded in April 2009 when JK Harris was formally charged with materially misrepresenting their ability to reduce federal income tax obligations. It took two years for a settlement with the firm to be finalized.

The settlement affects JK Harris & Company, JKH Financial Recovery Systems, LLC and Professional Fee Financing Associates as the three firms are closely related. All three firms substantially marketed services under the Offer in Compromise program even though most of their clients were not candidates.

President John Harris released his own statement regarding the settlement with Texas regulators:

“We are pleased to have reached a settlement with the office of Texas Attorney General Greg Abbott,” said Harris. “Our legal department, along with Thomas M. Gregor, Esquire and Ogden, Gibson, Broocks, Longoria & Hall, LLP have all worked diligently and cooperated with Mr. Abbott’s office since the April 2009 filing and we are glad to bring this case to a close.”

Tax filers looking to benefit from the Offer in Compromise program should be aware that equity and future earnings capability will reduce the likelihood that their tax liability will be reduced. Additionally, all collection activities including tax liens, wage garnishment and bank account levies can and will continue prior to any agreement being reached. Any firm that represents that they can avoid these consequences is likely a tax relief scam.

Kenneth Long
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Kenneth Long

President at Debtors Unite
Kenneth Long is President of Debtors Unite, Inc. as well as President and Vice Chairman for Vision Credit Education, Inc. He served as a regional coordinator for the North Carolina Saves campaign. Long co-founded the Wake EITC Coalition along with Family Resource Center of Raleigh.

Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.

Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.

In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.

Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!

Favorite quote:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Thomas Jefferson
Kenneth Long
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