Missouri AG files suit against JK Harris

The attorney general of Missouri has filed a lawsuit against a North Charleston company that offers help to taxpayers who owe money to the Internal Revenue Service, alleging that it failed to provide the services it promised and didn't provide refunds to customers who complained.

Missouri Attorney General Jay Nixon filed the lawsuit against JK Harris & Co. in state court on Tuesday. A copy of the complaint was not immediately available, but in a press release, Nixon's office said the suit was filed in response to complaints filed against the company by Missouri residents.

The lawsuit, according to the release, is seeking "full restitution" from JK Harris for the customers who claimed they did not receive any help from the company in settling their tax bills with the IRS.

The release noted that JK Harris' Web site describes a "step-by-step strategy ... to help consumers with their tax problems." But according to the release, consumers complained to Nixon's office that the strategy was not followed by the company, paperwork was lost and requests for refunds were denied.

JK Harris spokesman Josh Baker said the company had not received a copy of Nixon's complaint and so could not comment on specific allegations. However, he said, 'We have worked with over 1,400 customers in Missouri and have received four complaints, and we responded promptly to them.'

Baker said the complaints likely have been sparked by the fact that JK Harris is the largest player in the tax-settlement industry and so is a target for lawsuits. He noted that the company has had more than 225,000 customers since it was founded in 1997 and said the complaints represent "a very small percentage" of its clients.

JK Harris was the defendant in another lawsuit filed by Nixon's office, which was settled in 2005. In that settlement, the company neither admitted nor denied any wrongdoing but agreed to pay about $43,000 and change its business practices.

In June, the company reached a settlement in a similar lawsuit filed by the attorneys general of 18 states. JK Harris denied any wrongdoing but agreed to pay $1.5 million in restitution and change its advertising.

Last year, the company reached a similar settlement agreement in a class-action lawsuit filed in Charleston County. Under that settlement, JK Harris agreed to pay $6 million and make a number of changes to its business practices. The first payments under that settlement reportedly are scheduled to be sent out early next year.

The company provides help to people who owe back taxes to the IRS, through a program known as "offer in compromise," under which the IRS allows some people to settle their tax bills for less than the amount they owe.

Read more in Thursday's edition of The Post and Courier.