Sharpton tax inquiry concluded;
settlement reached on tax-debt firm
Wednesday, July 23, 2008
The IRS isn't talking, but the Rev. Al Sharpton's people are. And the word from the flamboyant New Yorker is that the feds have wrapped up their investigation into allegedly unpaid tax bills, blogged about here.
"The criminal investigation has now been closed," said Michael A. Hardy, Sharpton's lawyer. "We cooperated with their investigation, and we did everything they asked and produced everything they asked us to produce."
Apparently, part of what was produced was a $1 million-plus down payment from Sharpton toward a reported $1.5 million tax debt.
Read more on the end of the investigation in the New York Times, the Daily News and the Associated Press.
Tax-debt resolution company pays up: While Sharpton has his high-dollar New York City lawyers, many folks with IRS issues turn to companies that advertise they can help.
But some customers of one such firm apparently weren't too pleased. They complained. Their state prosecutors listened. And now the company in question is paying up.
JK Harris, the North Carolina-based firm that claims to be "The Nation's Largest Tax Resolution Company," has reached a $1.5 million settlement with 18 state attorneys general in connection with complaints that it did not follow through on its "pennies on the dollar" IRS debt reduction promises.
The money will go toward restitution payments to former clients. The firm also has agreed to change its advertising.
The states involved in the settlement are Arkansas, Arizona, California, Connecticut, Florida, Illinois, Massachusetts, Maine, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, South Dakota, Tennessee, Vermont, and West Virginia.
Texas is not on that list, but JK Harris has clients here. And business does indeed go on.
Less than two weeks after the settlement, the company issued a press release announcing that "JK Harris Helps Texas Family Get Back on Track after IRS Levy."
You can read more about the JK Harris settlement in WebCPA and the Boston Globe.
When it doesn't pay to pay for tax-debt help: In today's Wall Street Journal, Tom Herman's Tax Report column, Wiping Out Your Tax Debt Gets Tougher, also looks at the JK Harris case.
Company officials told Herman that they just wanted to get off the "radar screen" and get back to business, which this year is expected to generate revenues around $100 million. In some cases, according to the firm, problems arose from taxpayer misperceptions about exactly what could be done for them.
But Herman also examines why getting such outside help might not be worth it nowadays, especially in light of changes the IRS has made
Herman specifically cites changes in the agency's offer-in-compromise program, which could let taxpayers pay a smaller portion of their IRS bill. But as noted in this May 2006 Don't Mess With Taxes post, What's in it for me?, tax law changes mean that individuals now have to make a partial payment of their proposed settlement offer while the IRS is reviewing the case.
That's probably one reason why, says Herman, that the number of offers taxpayers made to the fell to 46,000 in 2007 from 106,000 in 2004.
You can follow this conversation by subscribing to the comment feed for this post.