Friday, June 25, 2010

BBB Complaints Run Rampant in the Colorado Tax Resolution Industry

During the past 36 months the BBBs Complaints Against Tax Resolution Companies:
1. Omni-Financial (Locations in CO and FL)
104 Complaints                                                                             

2. Quantum-Financial (now Berkshire Financial dba Berkshire Capital Partners dba Berkshire Tax Resolution)
31 Complaints                                                                                    

29 Complaints                                                             

25 Complaints
8 Complaints

7 Complaints

3 Complaints

3 Complaints 

2 Complaints                                                                                      

10. 3 Way Tie- 
Integrity Financial Associates, New Century Consulting, Larson Financial 
1 Complaint 

11. Patriot Tax Resolution, LLC
No Complaints-Only Recommended Company in Colorado (and that's because their is one guy running it who is honest)
The Big Three Tax Resolution Firms in America

1. JK Harris
852 Complaints

Government Action(s)

On June 12, 2008, the company entered into a Consent Judgement with the North Carolina Attorney General's Office. Attorney General Cooper and 17 other state attorneys general entered into a consent judgment with JK Harris and Company, L.L.C of Charleston, SC and its president, John K. Harris. Cooper claims that JK Harris did not help consumers with their tax problems as advertised and refused to give refunds when consumers complained that promised services were never completed. Cooper's complaint alleges tht JK Harris regularly advertised that it could help people who owed back taxes to the IRS by filing an Offer in Compromise (OIC) on their behalf and consumers would only have to pay "pennies on the dollar" of what they owed. The complaint contends that JK Harris charges money upfront for this service without actually determining if consumers qualified for an OIC or while knowing that consumers didn't qualify. The IRS accepts only a small number of of these kinds of cases. In many cases, JK Harris did not even apply to the IRSto help consumers as promised but still refused to give those consumers their money back. Under the terms of the consent judgement, JK Harris must make clearer disclosures to consumers and pay them refunds if they aren't able to work out a compromise with the IRS. The company must tell consumers under what circumstances they might qualify to reach a compromise with the IRS on back taxes and provide an accurate percentage of how many OIC offers the IRS accepts. The company must also refund consumers money if the IRS does not accept their case. The company also agreed to a number of other reforms to its advertising and sales practices and is barred from offering or performing credit repair services. The judgement also applies to JK Harris Financial Recovery System, L.L.C and Professional Fee Financing Associates, L.L.C both owned by John K. Harris.
Any North Carolina consumer who filed a complaint with the NC Attorney General's Office, the Better Business Bureau of the South Carolina Department of Commerce or who files a complaint within the next 90 days (through September 12, 2008) may be eligible for a refund from JK Harris. Consumer can contact Cooper's consumer Protection Division toll-free in North Carolina at 1-877-5-NO-SCAM.

738 Complaints

Government Action(s)

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.
On May 13, 2010 Texas Attorney General Greg Abbott charged Houston-based TaxMasters, Inc., and its chief executive officer, Patrick Cox, with multiple violations of the Texas Deceptive Trade Practices Act and Texas Debt Collection Act.

According to the state’s enforcement action, the defendants unlawfully misled customers about their service contract terms, failed to disclose its no-refunds policy, and falsely claimed that the firm’s employees would immediately begin work on a case – despite the fact that TaxMasters did not actually start to work on a case until its customers paid in full for services, even if that delayed response meant taxpayers missed significant IRS deadlines.

“In the midst of a national economic downturn, TaxMasters used a nationwide marketing campaign to offer services for distressed taxpayers who needed help dealing with the IRS,” Attorney General Abbott said. “A state investigation and nearly 1,000 customer complaints indicate that the defendants routinely misled customers about the nature of their tax resolution service agreements – and worse, attempted to enforce those improper agreements through unlawful debt collection tactics. The state’s enforcement action seeks to prohibit the defendants from continuing to violate the law and seeks restitution for the financially struggling taxpayers who were harmed by the defendants’ unlawful conduct.”

The defendants advertise a tax resolution service for federal taxpayers who have received notice from the IRS of an audit, garnishment, lien, levy or tax deficiency. Citing a self-styled “national advertising campaign” and high-profile “endorsements,” TaxMasters purports to have “one of the most effective tax relief teams in the tax representation business.” However, a state investigation – and nearly 1,000 complaints submitted to the Office of the Attorney General and the Better Business Bureau of Houston – indicate that the defendants have unlawfully misled their customers and failed to disclose material facts about their service agreements.

TaxMasters’ advertisements encourage taxpayers to call its toll-free number for a “free consultation” with a “tax consultant.” Court documents filed by the state indicate that callers are not connected to an employee qualified to give tax advice, but rather with a TaxMasters salesperson who recommends a “solution” for between $1,500 and $9,000 or more.

According to court documents, many callers were offered an installment plan so that they could pay the defendants’ fee over a specified period of time. However, callers who asked to see written terms and conditions prior to making a payment were informed that a credit card or bank account number is necessary to generate a written TaxMasters service contract. As a result, TaxMasters customers were unaware – and the defendants’ personnel did not have a practice of disclosing – multiple aspects of the TaxMasters service agreement that were harmful to taxpayers.

For example, the defendants did not disclose that all customer payments submitted to TaxMasters are non-refundable. Because customers were not provided written contracts and sales personnel did not reveal the no-refunds policy, customers did not know that they would not be able to recover any installment payments they submitted to TaxMasters – even if they ultimately decide to cancel before TaxMasters actually did any work on their tax case.

The state’s enforcement action also cites TaxMasters for failing to reveal that it would not begin work on a case until all installment payments had been remitted and the entire fee was paid. Multiple complaints indicate that customers entered into an installment agreement with the understanding that TaxMasters would immediately begin work on their case – only to discover later that no action was taken. Customers often learned that there was a problem when they received a notice from the IRS indicating that an important deadline had been missed or that additional fees and penalties had accrued.

Court documents filed by the state also indicate that the defendants failed to disclose TaxMasters’ requirement that customers pay the entire service fee – even if they opt to cancel their contract. Because customers are not provided a written contract, they were not properly informed that agreeing to make a single payment over the telephone obligated them to pay the entire fee quoted by sales personnel. Further, not only did TaxMasters attempt to obligate its customers to a fee in the absence of a signed contract, the defendants used unlawful debt collection tactics to enforce the unauthorized obligation.

According to the state’s enforcement action, the defendants not only failed to disclose material terms and conditions governing its services, but also failed to properly provide the “tax resolution” services that were advertised. Customer complaints obtained by the Attorney General’s Office cite TaxMasters for failing to contact and consult with the IRS on the client’s behalf; failing to appear on the client’s behalf at an IRS audit or hearing; failing to postpone or stop a wage or bank account garnishment; and failing to stop a levy or lien against a client’s property.

When customers who were unhappy with the defendants’ services sought refunds, TaxMasters refused to return the customers’ money. Court documents indicate TaxMasters not only refused to honor refund requests, it also pursued debt collection efforts against clients who cancelled their contracts. The state’s enforcement action charges TaxMasters with unlawfully threatening to pursue customers in Harris County courts, even if those customers did not reside in the county. Under Texas law, entities seeking to enforce a consumer contract can only do so in a county where the agreement was executed or where the consumer resides.

The state's enforcement action is seeking restitution for each TaxMasters customer who was financially harmed by the defendants’ unlawful conduct. In addition, the state is seeking civil penalties of up to $20,000 for each violation of the Texas Deceptive Trade Practices Act.

278 Complaints
Out of Business.