JK Harris Goes out of Business

JK Harris, the tax representation firm that purported to help taxpayers sort out their problems with the Internal Revenue Service, has suspended its operations.

The firm, which has been inundated for years by customer complaints, filed for Chapter 11 bankruptcy protection last October. It has now sent home its employees and is getting ready to liquidate its assets, according to ConsumerAffairs.com.

A notice on its Web site instructs clients that on Jan. 26, 2012, the U.S. Bankruptcy Court for the District of South Carolina approved the sale of its customer records to Resolute Tax Services LLC, another tax resolution firm.

JK Harris has been sued by attorneys general in at least 18 states for not providing the services it promised clients (see Tax Debt Firm to Pay $1.5M in Restitution, Missouri AG Sues Tax Resolution Firm and JK Harris Ordered to Reimburse Texas Tax Clients). With the demise last year of another tax resolution firm, Roni Deutch, after she was sued by the California Attorney General, the tax resolution business has definitely acquired a bad reputation (see ‘Tax Lady’ Roni Deutch Closes Firm Amid Allegations). Hopefully, Resolute and any other firms that stand to inherit Harris’s business will do better by their clients.

However, the notice on Harris’s Web site sounds a word of warning for his former clients:

“If you decide to enter into a contract with Resolute, you may receive a credit of up to 50% of the amount of fees that were previously paid to JK Harris,” says the notice. “If you consent to Resolute having access to your JK Harris client file and any information that you have provided JK Harris, please print the authorization form on the link below, sign it, and mail or fax it to the number or address on the form. YOU SHOULD CONSIDER THIS OFFER VERY CAREFULLY BEFORE DECIDING TO SIGN UP FOR RESOLUTE’S TAX SERVICES. By approving this sale, the Court has in no way indicated that you should enter into a contract with Resolute. You are not obligated to engage Resolute for any tax services by returning the form. If you do not wish to have your information transferred to Resolute, please sign and submit the form promptly to the address on the form and indicate you do not wish to participate in the transfer of your records to Resolute.”

While all of this may just be standard legalese, it’s understandable that Harris’s former clients should be wary. Still, as the notice adds, tax problems with the IRS are usually time sensitive and the agency isn’t fond of delays:

“Your tax situation is a time-sensitive matter and you should act quickly to protect your taxpayer rights. Responses to the IRS, for example, usually require a response or some action within 30 days. JK Harris has been closed since the end of December and many files will have upcoming deadlines. It is imperative that all clients make a decision about future representation in their cases promptly.”