Abuses of the IRS Offer in Compromise Process

J. K. Harris

J. K. Harris is one such company plagued with the woes of consumer complaints and subsequent lawsuits. JK Harris & Company, LLC was a tax representation firm. Founded in 1997, the company specialized in solving IRS and state tax problems. The founder, John K. Harris, penned three books on the subject and grew his company to national recognition. Although the company grew from 450 sales offices to eight regional operations centers, it still suffered under the burden of battling lawsuits where customers complained about misleading business and advertising practices. Lawsuits from past customers claimed that J. K. Harris charged exorbitant fees for resolving tax problems only to discover that the company failed to deliver on its promises. The company was also charged with engaging in deceptive practices. The company’s founder ushered the company through bankruptcy and the company was later shut down.

Tax Masters

Tax Masters is another company accused of committing fraud. A Texas jury found TaxMasters, a tax advisory firm, guilty of using deceptive practices in its bid to lure customers and . . . hit the company with a staggering $195 million in civil penalties” (ABCNews.Go.com, “TaxMasters, Patrick Cox Hit With Nearly $200M Judgment,” 8/21/2013). The decision was unanimous. The jury concluded that Patrick Cox’s firm had “violated the state’s deceptive trade practices . . . by misleading customers in television ads and sales calls about upfront costs” (“TaxMasters”). The jury charged that TaxMasters created confusion in the minds of its customers concerning the services the company offered. TaxMasters would tell a potential customer that it could get their payment down “next to nothing,” which goes against current IRS repayment programming. TaxMasters ended up filing for bankruptcy. TaxMasters still operates in Minnesota but under strict scrutiny. “Failure to abide by the settlement would make TaxMasters and Cox ineligible to do business in Minnesota and trigger a $400,000 penalty” (“TaxMasters”). The most important idea to take from reviewing these national tax agencies is this: much of what you need to resolve your tax liability is on the IRS website and within the tax guidance the IRS representative sends you through the mail. When you receive a notice concerning your tax liability, the IRS also refers you to their tax guidance. Spending just a couple of hours reading and reviewing the material will save you money. The only fees you need to spend are the ones required to file the forms. Anything in excess of this is a waste of money.