J K Harris

[thomtax]

I just watched an ad on tv. This elderly lady is complaining that the IRS is applying her payment to penalties and interest and she is not getting the principal paid down.

Her:"Why last week I did not have the $40 to pay for my medicine".
Spokesman: She hired us and we were able to yadda, yadda, etc.

What popped into my mind was that if she could not afford $40, how could she hire JKHarris?

[taxea]

J K Harris

She probably got it backwards...she paid JK H so now she can't afford $40 Rx. I just don't understand why our "powers that be don't regulate the crooks". Wish I had what it takes to charge a client $6000. to do an IA or OIC. taxea

[solomon]

I thought JKH was sued by several attorney generals for over a million.

[Zee]

Are you sure JKH is that bad?

JK Harris was raided several years ago (not long before Gore lost the election). To my knowledge, nothing ever resulted from the raid, although it was big news at the time. I'm going to have to do a little research to see if there was a settlement of some kind. If there was, it wasn't reported.

I actually interviewed with JK Harris (on the day of the Bush/Gore election), they wanted to open a processing center in PA. Their staff consists largely of Enrolled Agents and CPA's. They are knowledgeable, and have numerous quality control checks and balances throughout the OIC process which can be cumbersome, time-consuming. Honestly, I don't remember their pricing practices but didn't believe they were over-priced for the more difficult cases. We did have a disagreement. They wanted me to sign OIC documents as a CPA. PA ethics at the time would not permit that since JKH is not a CPA firm.

JKH finds their clients through extensive TV and print advertising. They utilize sales representatives in virtual offices renting time as needed to meet with potential clients. As such, there claim to have offices everywhere is true, but somewhat misleading. The representatives screen the clients and collect data which is reviewed by the processing centers before the client is accepted.

The JKH Executive staff and Managers have lots of experience, and are professional in their approach. Like most of you, I would have expected less. I was surprised. You might be too if you actually saw their operations, the processing, and quality controls.

However, here's a link to some recent complaints about JK Harris. They aren't pretty.

http://www.consumeraffairs.com/finance/jk_harris.html

One common theme, however, is the long time frame to close the OIC. Folks just don't understand that the OIC process takes a very long time, often more than a year. I do remember that JKH did monitor and track their success rate but don't remember the statistics, or whether or not they offered any specific guarantees. When folks complain about different caseworkers, JKH has several levels of responsibilities and reviews, so it's my guess the folks they are talking to are at different levels of responsibility. Obviously, they do try to limit conversations with clients once the data is collected and submitted. That's understandable because there isn't much they can say once the OIC has been submitted awaiting an IRS response. They do have specialists with IRS collection experience to help with levies, etc.

Please understand I'm not endorsing JKH practices or techniques, or their advertising. I'd like to know their actual success rate and percentage of savings. I don't know what they tell people in the sales process.

Here's another recent article on JKH:

http://www.webcpa.com/article.cfm?articleid=28461&page=3

Apparently they did settle two major class action lawsuits. One for $6 million. As I thought, the perception from clients was locally based offices would be processing their OIC. Apparently, prospective clients couldn't recognize a virtual or office suite type of complex when they visited with the sales representative. I still find that advertising to be misleading, but I guess you could argue that an office suite is an office. JKH isn't alone in using suites. I remember when I was looking for office space I inquired about office space that appeared unoccupied by the Visiting Nurse Association in three situations. In each, there was an sparsely furnished office with nobody there. Apparently, it's a legal requirement that an office be maintained in the VNA situation even though there is never anybody in them. Go figure.

[thomtax]

Worse - I now think

After looking at the sites you posted (thanks for them) I believe that they are much worse than I originally thought.

Are you glad that you did not go to work for them?

[Zee]

After looking at the sites you posted (thanks for them) I believe that they are much worse than I originally thought.

Are you glad that you did not go to work for them?

Good question.

My responsibility would have been managing the processing center operations.

Honestly, I'm not sure about working for them. I think they do as good of a job (if not better) than other OIC preparers. They do have good experienced staff and contacts within the IRS, and do understand the ins & outs of an OIC very well.

I believe their problem is in the sales & marketing side of things. The ads make an OIC sound easy. They aren't. As far as the complaints about contacting them, etc. remember they process thousands of OIC's each year. Each can take 12-18 months for resolution. Once submitted, it's "wait & see", then re-negotiate. Their clients are mostly deadbeats in the first place that's how they got in trouble. I wouldn't work with any of them without substantial payment upfront. That's the rub. Many OIC's aren't successful. I'm sure most are, or they wouldn't still be in business. Their clients are at the "end of the road", they are anxious, worried, frustrated and always looking for someone to blame and are very hard to work with.

Most complaints include much about communications and refusal to take calls. As I recall, clients were told upfront not to call the offices for follow-up on a routine basis. I do think the ad suggesting they have 400+offices is indeed misleading. Anyone can have 400+ offices if they simply pay for them as they use them on an hourly basis. I don't know if it's a fact they use only virtual office suites, but I suspect it's largely true.

I didn't meet John Harris, but my understanding is he's a bit of a nut case and doesn't listen to others well. The executive team I met were well-educated, experienced, and appeared to be good managers. I was also impressed with the clerical staff members. I do remember meeting with his CFO and he was highly frustrated that John Harris insisted they run the entire accounting systems using Quickbooks. It was far too large for Quickbooks at the time, but John Harris wouldn't change to a more appropriate software.

[Richcpaman]

Zee:

Don't you think that is the problem?

Over Promise and Under deliver?

I've done my share of OIC's and I KNOW it takes 18 months.

I'm very explict with my clients in that respect. Timeframes and possible outcomes.

I SHOULD be charging a large retainer up front, but I bill them as I go thru the process.

Since the process is a flurry of activity then a long wait for the IRS, and then a flurry of activity again. But the majority of those compliants on the consumer affairs site is about the fact that after a YEAR there is STILL not on OIC filed. That's outrageous on its face.

Now, I understand that many of these taxpayers are looking for the deal anyway, paying JKH X dollars and then the taxing authorities a % of the debt. And many of them can't SEEM to get thier paperwork down without a gun to thier head.

But that where JKH's process is at fault. They KNOW that the clients have issues and with the upfront fees that they have charged, they should, as a minimum, just get the darn paperwork filed in a timely manner. And keep track of the info that they DO GET.

The IRS's own Inspector General said that if the IRS just accepted the FIRST OIC from the Taxpayer and collected THAT amount, the OIC process would collect four or more times the amount of dollars that the IRS EVER realizes from these taxpayers.

Would I rather have the taxpayers pay the FULL tax? Yes. Would I rather have the IRS NOT do OIC's? Yes. Should the OIC process end up with the taxpayers compliant in the future, H3LL YES! But if your going to RUN the program, staff it, give people an answer in a timely manner and operate it in good faith. That's my rant against the IRS.

Rich

[Zee]

Rich-

Is "over promise, under deliver" the problem. My guess is "yes", but the problem also most likely includes clients hearing only what they want to hear. As I recall, JKH does caution prospective clients about the timing and probability of results. I do know they decline cases where the probability of a favorable outcome is low.

On my two-day visit, I found that JKH had extensive checks & balances throughout the process including timeliness of submission. They monitored any delays carefully, most were caused by the clients not returning necessary information. My guess is a lot of the delays are caused by the client's not responding to information requests, but I don't know for sure.

I really don't want to sound like a commercial for JKH. My point is I was impressed with their operations. I didn't observe their sales process, but would have liked to sit in on a sales meeting with a prospect.

Frankly, my guess is a large percentage of the complaints aren't really justified, but I'm sure some are. My guess is a lot of the important facts aren't disclosed in the complaint letters. It's the nature of the business. I've always found that those that don't pay their taxes or plan for them are the biggest complainers.

Rich, you indicated you've done your share of OIC's. I've only done one many years ago, and it wasn't successful. It was a daycare provider with almost no income or assets that owed about $20,000. The best I could do was an installment plan. When I talked to JKH I had studied OIC procedures, purchased expensive software and was very well educated on the entire process. However, I determined I just couldn't market an OIC speciality with a one-person firm.

Rich, of those you've done, what has been your success rate? Can you provide a few examples? I'm curious how successful an individual practioner can be. I don't blame JKH for getting an upfront fee. In fact, I wouldn't touch an OIC client without a retainer of some sort, or pay-as-you-go (like you).

[joanmcq]

The over promise and underdeliver that I have a complaint with is taking a huge retainer, and in essence, doing nothing because the people will in no way qualify for an OIC. Its not too difficult to do a quick pre-qualify, which from the complaints I've read about JK & their ilk, they do not do.

[DaveO]

I've done a couple of OIC

Over the last 5 years or so. Both took over 9 months to settle but both were accepted. In that time I've also told a dozen or so clients that they would not qualify and we did installment agreements or sought penalty abatements. I've had a couple of cases where an OIC would have been successful but the client didn't want to pay the money and choose to grind out the statute of limitations instead. A couple went to JKH and after a $2000 retainer were told they wouldn't qualify. $2000 is mighty high for an installment agreement. Desperate taxpayers are easily seduced by the "pennies on the dollar" pitch.

[Zee]

The over promise and underdeliver that I have a complaint with is taking a huge retainer, and in essence, doing nothing because the people will in no way qualify for an OIC. Its not too difficult to do a quick pre-qualify, which from the complaints I've read about JK & their ilk, they do not do.

As I recall, JKH does prequalify clients. I don't remember how extensive it was. Their sales agent's, however, most likely try to "close the sale" at the first meeting with a retainer and some kind of return of the retainer if they're deemed non-qualified (I don't remember). How well, might be an issue. But, keep in mind they're dealing with thousands of clients, not a few. I've often wondered where the folks that can't pay their taxes find the money to pay JKH upfront.

Again, I'm only offering an opinion on my observations at their Corporate and processing centers. I was free to roam and ask questions, review files, etc. for most of one day.

[Zee]

Over the last 5 years or so. Both took over 9 months to settle but both were accepted. In that time I've also told a dozen or so clients that they would not qualify and we did installment agreements or sought penalty abatements. I've had a couple of cases where an OIC would have been successful but the client didn't want to pay the money and choose to grind out the statute of limitations instead. A couple went to JKH and after a $2000 retainer were told they wouldn't qualify. $2000 is mighty high for an installment agreement. Desperate taxpayers are easily seduced by the "pennies on the dollar" pitch.

Was the retainer returned by JKH?

[DaveO]

JKH kept the retainer

One of the OIC cases I did close that gone to JHK and had paid a retainer. After nearly a year with no progress they came to us. They had to retain an attorney to get their money back from JKH less a $50 refund processing fee.

As far as I know the others haven't gotten anything back. I think they are too embarassed to bring the subject up. When they told me they had paid $2000 to find out they didn't qualify for an OIC I told them I would have told them that for half that much.

[joanmcq]

One friend I have went to JK. Ponied up about 2K. Got NOTHING for it but requests for more money to continue his case. It involved years of unfiled returns. The person on the POA was clueless. I at least got a POA, and got wage & income transcripts and was able to file some of the back returns. I think his retainer was used up in filing the POA>

[solomon]

1.5 Million

http://www.dispatch.com/live/content/business/stories/2008/06/13/no_pennies.ART_ART_06-13-08_C10_6RAFQCF.html?sid=101