OK so, I got behind on my taxes. My fault just had a brain f**t. I contracted with JK Harris to help me out?

Question

Now I see they just lost a huge lawsuit for not doing what they say they can do. And they have $1500.00 of my $$$ What do I do? They have filed 4 years of past returns. But I'm not sure that now that I know a little more that I couldn't have just gone to a local CPA.

So Ride it out or get out? If so how?

Answer 1

It depends on what the $1,500 is for - and what they promised you.  It probably also depends on who you are working with at JK Harris and if you just have to file tax returns, or if you owe a huge amount of money and are expecting them to reduce your fees and penalties. I would expect the employees of JK Harris are kind of like H&R Block - some know what they are doing and others are just out to make a buck, and don't know alot.

You also have to realize that what may have worked for JK Harris five or ten years ago may not work in the tougher enforcement environment that the IRS is moving towards.  For a while the IRS was trying to become a kinder, gentler organization - but there is evidence that they are toughening up some of their enforcement policies.  First-tier penalties for tax preparers increased from $250 to $1,000.  Second-tier penalties increased from $1,000 to $5,000.  That is a big jump.

Depending on how complicated your tax returns are - they may have overcharged you.  We can file four years of tax returns for $500 to $1,000.  More if you have a business return as well.

It might be worth spending $50-$100 to consult with another tax preparer.  Look for an EA - an enrolled agent who has passed the IRS testing and credentialing process

Answer 2

You need to read your retainer contract and find out exactly what you contracted for.  You've paid them $1,500 and they've prepared and filed 4 years of returns.  Has that exhausted the $1,500?  Are they billing you on an hourly basis?  Have you received detail of the time spent?  What other services are covered?  Are they billing you hourly for these services?  Have they performed any?  If they've exhausted the retainer do they just keep racking up the time until they get around to billing you?

You really need to read that contract and see where you stand.  It's entirely possible that you are incurring fees with them even as you read this.

You probably would have been better off with either a local CPA or tax attorney.

Answer 3

Your contract with JK Harris should spell out what you agreed to.

If they have performed the work, you won't get a refund.  

Answer 4

OK, that's 2 mistakes.

If they've filed four years of past returns, and you are sure that they really did. I'd just leave it alone, but wouldn't pay them more to try to get out of paying what you owe.  If there is more yet to do, I'd take it to a local CPA

Answer 5

If they just filed your tax returns for you then I must assume you were delinquent in filing taxes timely, and IRS has send you correspondence requesting you file all your delinquent returns.  

All you had to do is go to a tax preparer to file the taxes for you then mail them to the appropriate mailing address and if you owed then request an installment agreement.

You didn't have to pay anyone $1500 to do this for you.

Check out your contract and read all the fine prints to check if you can get your money back, expect for the amount they charge for preparing your returns.

Answer 6

J K Harris and another big tax resolution company both took hits from suits filed against them by states.  Many of them have poor records with their local Better Business Bureaus.

How much more has JKH promised to do for $1,500.  That could be a reasonable fee for tax preparation but is kind of high for an ordinary person. If you get into to representation, they will probably quote you fees in the $4,000 range and "seem to promise" to deliver but won't be able to.  

The first thing IRS is going to want from you is compliance with filing requirements.  It won't deal at all without that.

Answer 7

I hired them also and I had a short term problem and they did not act fast enough and I waited 2 months for a refund and I got it. It sounds like they are working on their behalf. This lawsuit was interesting. Some government guys came to my work to interview me.