Tax Masters and JK Harris Face AG Inquiry


While the Federal Trade Commission has cracked down on debt settlement and loan modification firms that charge upfront fees, little has been done to rein in tax resolution companies that promise to reduce IRS liabilities.  The FTC has allowed a number of these operations to continue while making a determination whether the agency has authority over them.

With the April 18th tax deadline three weeks away, tax relief companies have increased late night advertising and Internet promotions promising to settle delinquent IRS debt for pennies on the dollar.  Several of these companies are under investigation for deceptive practices.

Florida Attorney General Pam Bondi has initiated a civil inquiry into Texas based Tax Masters and South Carolina based JK Harris and Company following the receipt of 26 and 92 complaints respectively.  These companies solicit clients nationwide promising to reduce anxiety and debt to the IRS.

Tax Masters is being investigated for allegations of unfair competition and deceptive trade.  Consumer complaints allege violations consisting of: failing to provide service as initially contracted, misrepresentation of the breath of services to clients, charging for unnecessary services, unauthorized credit card transactions, as well as failing to provide refunds. 

The Texas and Minnesota attorneys general also filed civil charges of deceptive and unfair trade practices against Tax Masters in 2010.

JK Harris and Company is under investigation for allegedly violating a 2008 settlement with Florida and 17 other states over what regulators said were misleading sales tactics.  Among the allegations were false claims that case processors were former IRS agents or tax experts and that the company failed to provide refunds for clients it was unable to help. 

The Attorney General’s Office is continuing to work on the multi-state investigation regarding JK Harris. North Carolina is the lead state. JK Harris has been responsive to a list of Florida consumer complaints forwarded to their attention.  However, they have not been responsive to the multi-state requests for additional information and documents as part of the continuing investigation.

Some tax relief operations are the target of legal inquiries and lawsuits by regulators in multiple states.  Thousands of consumers nationwide have complained they demanded advance fees of up to $25,000, while promising relief from back taxes and penalties, then did nothing.

Tax-relief companies have flourished as the Internal Revenue Service has more aggressively pursued delinquent taxpayers.  According to the IRS Data Book, the agency filed nearly 1.1 million liens nationwide in fiscal year 2010, an increase of over 60 percent from 2007.

In a seemingly unregulated industry, tax resolution firms have gone largely unnoticed.  A lack of determination of authority from the FTC, tough economic times, and a taxpayers desire to reduce anxiety and IRS debt, have allowed them to exist.  Good common sense in choosing a credentialed tax expert and paying huge upfront fees has been ignored.

According to the Internal Revenue Service, three professionals are authorized to represent taxpayers before them – attorneys, certified public accountants and enrolled agents, all whom must pass an IRS test and take refresher courses.  

In the absence of representation, consumers can negotiate back taxes and penalties directly with the Internal Revenue Service.

Regulators and consumer advocates warn against using companies guaranteeing what the Internal Revenue Service calls an “offer in compromise” — a settlement for reduced tax payment.  Although increasing, IRS statistics show that only 25 percent of compromise applications are granted.

Taxpayers seeking relief from IRS debt should also be aware that companies claiming to be tax specialists may simply be advertising the services of a third-party.

Unlike the debt settlement and loan modification industry, tax resolution services are unregulated in Florida.  Despite the huge volume of complaints regarding advance payments and deceptive advertisements, lawmakers have taken little notice.  No regulation seems on the agenda of the 2011 Florida legislature.

To file a complaint with the Federal Trade Commission, visit www.ftc.gov or call (877) FTC-HELP (877-382-4357).

To file a complaint with the Florida Attorney General, please visit www.myfloridalegal.com or call (866) 9-NO-SCAM (866-966-7226).

To review Bill Lewis’ entire consumer protection series, visit http://www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into The Credit Report with Bill Lewis, weekdays at 9 o’clock on AM 1470 WWNN.

Tax Relief Firms Being Investigated


While the Federal Trade Commission has cracked down on debt settlement and loan modification firms that charge upfront fees, little has been done to rein in tax resolution companies that promise to reduce IRS liabilities.  The FTC has allowed a number of these operations to continue while making a determination whether the agency has authority over them.

With the April 18th tax deadline a month away, tax relief companies have increased late night advertising and Internet promotions promising to settle delinquent IRS debt for pennies on the dollar.  Several of these companies are under investigation for deceptive practices.

Florida Attorney General Pam Bondi’s office has initiated a civil inquiry into Texas based Tax Masters and South Carolina based JK Harris and Company following the receipt of 26 and 92 complaints respectively.  These companies solicit clients nationwide promising to reduce anxiety and debt to the IRS.

Tax Masters is being investigated for allegations of unfair competition and deceptive trade.  The Texas and Minnesota attorneys general also filed civil charges of deceptive and unfair trade practices against them in 2010.

JK Harris and Company is under investigation for allegedly violating a 2008 settlement with Florida and 17 other states over what regulators said were misleading sales tactics.  Among the allegations were false claims that case processors were former IRS agents or tax experts and that the company failed to provide refunds for clients it was unable to help.  State officials say JK Harris is cooperating with the investigation.

Some tax relief operations are the target of legal inquiries and lawsuits by regulators in multiple states.  Thousands of consumers nationwide have complained they demanded advance fees of up to $25,000, while promising relief from back taxes and penalties, then did nothing.

Tax-relief companies have flourished as the Internal Revenue Service has more aggressively pursued delinquent taxpayers.  According to the IRS Data Book, the agency filed nearly 1.1 million liens nationwide in fiscal year 2010, an increase of over 60 percent from 2007.

In a seemingly unregulated industry, tax resolution firms have gone largely unnoticed.  A lack of determination of authority from the FTC, tough economic times, and a taxpayers desire to reduce anxiety and IRS debt, have allowed them to exist.  Good common sense in choosing a credentialed tax expert and paying huge upfront fees has been ignored.

According to the Internal Revenue Service, three professionals are authorized to represent taxpayers before them – attorneys, certified public accountants and enrolled agents, all whom must pass an IRS test and take refresher courses.  

In the absence of representation, consumers can negotiate back taxes and penalties directly with the Internal Revenue Service.

Following the 2008 settlement, JK Harris changed its business model and claims to charge only in advance for a report that analyzes what program a taxpayer would be qualified to participate.  Taxpayers could then use the report to negotiate directly with the IRS or retain JK Harris to represent them.

Tax Masters said the company adopted a similar model last year and is charging fewer upfront fees.  Following an analysis, clients can decide if they want Tax Masters to pursue a resolution and will be charged only if the company is successful.  The average Tax Masters client pays $4,500.

Regulators and consumer advocates warn against using companies guaranteeing what the Internal Revenue Service calls an “offer in compromise” — a settlement for reduced tax payment.  Although increasing, IRS statistics show that only 25 percent of compromise applications are granted.

Taxpayers seeking relief from IRS debt should also be aware that companies claiming to be tax specialists may simply be advertising the services of a third-party.

Unlike the debt settlement and loan modification industry, tax resolution services are unregulated in Florida.  Despite the huge volume of complaints regarding advance payments and deceptive advertisements, lawmakers have taken little notice.  No regulation seems on the agenda of the 2011 Florida legislature.

To file a complaint with the Federal Trade Commission, visit www.ftc.gov or call (877) FTC-HELP (877-382-4357).

To file a complaint with the Attorney General’s Office, visit www.myfloridalegal.com or call (866) 9-NO-SCAM (866-966-7226).

To review Bill Lewis’ entire consumer protection series, visit http://www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into The Credit Report with Bill Lewis, weekdays at 9 o’clock on AM 1470 WWNN.

Beware of IRS Scams


Tax season is upon us and with three extra days to file your return this year, the IRS is warning against scammers that prey upon the unsuspecting. If you are preparing your tax return and searching online for the official site of the U.S. Internal Revenue Service, be sure not to click on www.IRS.com by mistake. This private website is owned by Banks.com, Inc. and is not related to the governmental entity we have all grown to love.

Despite yearly warnings and stories of the unsuspecting falling prey to scams, the IRS is calling for taxpayers to be alert for predators who may attempt to contact them by e-mail, telephone, fax, or regular mail pretending to be from the IRS.

They warn that “many of these scams fraudulently use the Internal Revenue Service name or logo as a lure to make the communication more authentic and enticing.” In the form of the fake IRS e-mail, this is known as phishing.

The Internal Revenue Service, like all U.S. government websites, uses the “.gov” top-level domain name and can be found at www.IRS.gov. According to the Internet resource provider WHOIS, the IRS.com domain name was registered in 1999 by the seemingly legitimate Banks.com, Inc. The banner headline on the homepage suggests an official association: “US Tax Center – Tax Information You Can Trust.”

The IRS.com website is not affiliated with the government despite the misleading “US Tax Center” title. While the company appears to be a legitimate private business, they are difficult to reach offering only an e-mail form, no phone number or e-mail address, and several unlinked icons. Several pages offering “how-to” related articles are blank.

The goal of scammers is to trick the unsuspecting into revealing personal information such as name, address, date of birth, Social Security number, credit card, and PIN numbers, or other confidential information. With this information, scammers steal money or commit identity theft. Personal information should never be revealed until verification is made upon a legitimate request.

The Internal Revenue Service advises taxpayers on how to respond should they receive a suspicious e-mail, telephone call, fax or letter:

The IRS does not request detailed personal and financial information like credit card or PIN numbers, passwords or similar secret access information.

The IRS does not initiate taxpayer communications through e-mail and will not send a message about your tax account. If you receive an e-mail from someone claiming to be the IRS or directing you to an IRS site; do not reply to the message, click on any of the links, or open any of the attachments.

The official IRS website is http://www.irs.gov. Do not be confused or misled by websites claiming to be the Internal Revenue Service but ending in .com, .net, .org, .us, or designations other than .gov. If you discover a website claiming to be the IRS but suspect it is bogus, do not provide personal information and report it to the IRS.

If you receive an e-mail, telephone call, fax or letter from an individual claiming to be from the Internal Revenue Service, but suspect they are not, contact the IRS at 1-800-829-1040 to determine their legitimacy.

Become proactive in shutting down scams and prevent others from being victimized. Report scams and learn what to do if you have been victimized at http://www.irs.gov, keyword ‘phishing,” or e-mail the IRS at phishing@irs.gov.

Consumers who believe they have been victimized by an IRS scammer or identity thief should also visit the Federal Trade Commission’s website at http://www.OnGuardOnline.gov for guidance. The IRS is one of the site sponsors. 

To review Bill Lewis’ entire consumer protection series, visit www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune – Media General Group http://www2.highlandstoday.com/content/2011/feb/27/LCNEWSO1-beware-of-irs-scams/

Walking Away from a Successful Business


While 2010 has been challenging with baby Rebecca and William III joining their older sister Katherine in the Lewis household, decisions and choices for change in 2011 are proving an equal challenge.

Between a growing family and commitment to several businesses and charitable causes, there is simply not enough time in the day.

Struggling through tough economic times and an industry that is heavily scrutinized and frowned upon – the credit repair industry – decisions must be made. Does one continue working in an industry they have grown to hate?

Does one sell the business with its perfect record and reputation within the community? Or do they simply shut down and walk away from a profitable business after a decade in existence?

When you hear about credit repair companies from “reputable” sources, such as the Attorney General’s Office or Federal Trade Commission (FTC), you are usually warned about the disreputable nature of the industry. You are warned about hiring credit repair companies and advised that you are better off repairing your own credit through a do-it-yourself approach.

Why have credit repair companies been made into villains? Answer – because most of them are, in fact, nothing more than scams or fly-by-night outfits. Most of these companies promise unsuspecting customers that they can magically erase all of their debt for a small fee. Others advise they can legally create a new identity through use of a Taxpayer Identification Number (TIN) or Credit Profile Number (CPN), thus segregating one credit identity from another.

Use of a Taxpayer Identification Number or Credit Profile Number, also referred to as a Credit Privacy Number, is highly illegal and could result in criminal charges of mail or wire fraud, identity theft, or misuse of personal information. File segregation is something that is not advised if you value your freedom.

Started on Sept. 10, 2001 approximately 100 yards from the downtown Hollywood home of 9-11 hijacker Mohamed Atta, Credit Restoration Consultants attempted to present a new approach in the “credit restoration” industry. Hesitant to utilize the forbidden term “credit repair,” Credit Restoration Consultants branded itself as a credit service organization specializing in the restoration of consumer credit worthiness as well as identity theft.

Among the clients of Credit Restoration Consultants were a variety of sorts. Whether the “average Joe,” attorneys, doctors, multi-millionaire developers, celebrities, pro-sports players, or politicians; including, a sitting governor, U.S. senator, and several congressmen, each had varying expectations bordering on the unreasonable, unrealistic or downright ridiculous. Each expected an 800 FICO score despite late payments, collections, repossessions or foreclosures, in addition to federal tax liens and bankruptcies.

One would not be surprised on just how many politicians have had federal tax liens filed against them.

While the FTC shutdown 33 credit repair companies in 2008 and 36 in 2009 for violations of the Credit Repair Organizations Act, Credit Restoration Consultants has never had a complaint to any state, federal, or local regulatory authority. In fact, Credit Restoration Consultants maintains an A+ rating with the Better Business Bureau and a complaint free history.

According to a recent Small Business Administration study, seven out of 10 new businesses survive at least two years, half at least five years, a third at least 10 years, and a quarter 15 years or more. Credit Restoration Consultants lasted just under 10 years.

Tired of the bad actors and scam artists in an already heavily scrutinized credit repair industry, I have decided to simply shut down, throw in the towel, and walk away.

Rather than sell the successful business that Credit Restoration Consultants became and have another destroy it and my personal reputation, walking away seems the best course of action. With that – I quit.

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune – Media General Group http://www2.highlandstoday.com/content/2011/jan/02/walking-away-from-a-successful-business/

To review Bill Lewis’ entire consumer protection series at the Highlands Today, visit www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.

Massive Internet fraud shut down by FTC


The Federal Trade Commission has taken legal action against a far-reaching Internet enterprise that allegedly made millions of dollars by luring consumers into “trial” memberships for bogus government-grant and money-making schemes, then repeatedly charged them monthly fees for services they never agreed upon.

According to the FTC’s complaint, “I Works” utilized websites touting the availability of government grants to pay personal expenses or to pitch various money-making programs. The websites offered “free” information at no-risk with a small shipping and handling fee. When consumers provided their billing information, I Works charged them hefty one-time fees of up to $129.95 and monthly recurring fees of $59.95 for the grant or money-making programs.

As a result of the I Works scam, hundreds of thousands of consumers disputed charges on their debit or credit cards. The number of charge-backs was so excessive that millions of dollars in fines were assessed and the company was blocked from accounts maintained by VISA and Mastercard. To keep the scam going, I Works tricked banks into giving them continued charging privileges by creating 51 shell companies with figurehead officers, and by providing them with phony “clean” versions of their websites.

The FTC’s complaint alleges that I Works offered consumers bogus money-making and government-grant opportunities. I Works claimed that the offers were “free” or “risk-free” and that only a small shipping and handling fee would be charged.

The FTC charged I Works with violating federal law by misrepresenting government grants were available for paying personal expenses, that consumers were likely to obtain grants by using the I Works program, that users of their money-making products would earn substantial income, and that their offers were free or risk-free. The complaint also alleged that I Works failed to disclose to consumers who pay the small shipping and handling fee that they would be enrolled in expensive plans that charge fees until cancelled and for charging consumers’ credit cards and bank accounts without their permission.

In addition, the FTC alleged that I Works posted deceptive positive reviews and used deceptive testimonials that misrepresented the benefits of their grant services. Finally, the FTC charged I Works with violating the Electronic Fund Transfer Act and Regulation E by debiting consumers’ bank accounts without their signed written consent and without providing them with a copy of the written authorization.

The FTC complaint named 10 individuals, 10 corporations, and 51 shell companies as defendants. As alleged, the scam was orchestrated by Jeremy Johnson, the sole owner of I Works Inc. In addition to Johnson, Duane Fielding, Andy Johnson, Lloyd Johnston, Scott Leavitt, Scott Muir, Bryce Payne, Kevin Pilon, Ryan Riddle, and Terrason Spinks were named as defendants. Anthon Holdings Corp., Cloud Nine Marketing Inc., CPA Upsell Inc., Elite Debit Inc., Employee Plus Inc., Internet Economy Inc., Market Funding Solutions Inc., Network Agenda LLC, and Success Marketing Inc. were named as corporate defendants.

I Works gained access to the Visa and MasterCard systems through many entities. The banks included: Wells Fargo, HSBC Bank USA, First Regional Bank, Harris National Association, and Columbus Bank and Trust Company. Payment processors included First Data, ECHO, Global Payment Systems, Litle & Co., Moneris, Payment Tech, Trident, and Vital, as well as independent sales organizations, including CardFlex, RDK Inc., Merchant eSolutions, Pivotal Payments, PowerPay, and Swipe Merchant Solutions.

The 51 shell companies named in the complaint are: Big Bucks Pro, Blue Net Progress, Blue Streak Processing, Bolt Marketing, Bottom Dollar, doing business as BadCustomer.com, Bumble Marketing, Business First, Business Loan Success, Cold Bay Media, Costnet Discounts, CS Processing, Cutting Edge Processing, Diamond J. Media, Ebusiness First, Ebusiness Success, Ecom Success, Excess Net Success, Fiscal Fidelity, Fitness Processing, Funding Search Success, Funding Success, GG Processing, GGL Rewards, Highlight Marketing, Hooper Processing, Internet Business Source, Internet Fitness, Jet Processing, JRB Media, Lifestyles For Fitness, Mist Marketing, Money Harvest, Monroe Processing, Net Business Success, Net Commerce, Net Discounts, Net Fit Trends, Optimum Assistance, Power Processing, Premier Performance, Pro Internet Services, Razor Processing, Rebate Deals, Revive Marketing, Simcor Marketing, Summit Processing, The Net Success, Tranfirst, Tran Voyage, Unlimited Processing, and Xcel Processing.

“No consumer should be sucker-punched into making payments for products they don’t know about and don’t want,” said FTC Chairman Jon Leibowitz.

If you have been a victim of I Works, a complaint can be filed with the Federal Trade Commission at http://www.ftc.gov.

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune – Media General Group http://www2.highlandstoday.com/content/2010/dec/26/massive-internet-fraud-shut-down-by-ftc/columns-welewisjr/

To review Bill Lewis’ entire consumer protection series at the Highlands Today, visit www.williamlewis.us.

 

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.

Stop Annoying or Harassing Phone Calls


Are you receiving annoying or harassing phone calls from telemarketers or debt collectors? In these tough economic times, your telephone seems to ring more often. There are actions you can take to reduce the number of calls you receive. First, you must determine whether the caller is a telemarketer attempting to solicit a product or charity, or a debt collector attempting to collect a past due bill.

To stop most telemarketers from calling your home or cell phone, you must sign up through the Do Not Call Registry offered by the Federal Trade Commission. Registration can be made online at www.donotcall.gov or by calling 888-382-1222 from the number in which you seek to block.

The national Do Not Call Registry gives you an opportunity to restrict most telemarketing calls received on your home or cell number. Once you register, telemarketers covered by registry rules have up to 31 days to remove your phone number from their calling lists. Should the telemarketing calls continue, you have a right to file a complaint with the FTC.

The Federal Trade Commission says that “because of limitations in the jurisdiction of the FTC and FCC, calls from or on behalf of political organizations, charities, and telephone surveyors would still be permitted, as would calls from companies with which you have an existing business relationship, or those to whom you’ve provided express agreement in writing to receive their calls. However, if you ask a company with which you have an existing business relationship to place your number on its own do-not-call list, it must honor your request. You should keep a record of the date you make the request.”

Distinguished from the telemarketer, is the debt collector. If you owe a past-due bill, debt collectors have the right to call you – but not harass you. The Federal Trade Commission enforces the Fair Debt Collection Practices Act (FDCPA), a federal law that prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.

There are many types of debts covered by the FDCPA. Personal, family, household debts, auto loans, medical bills, and even your mortgage are all protected under the law. The FDCPA, however, does not cover debts incurred to run or operate a business.

Some of the most common questions about debt collectors and consumer rights can be answered by visiting the Federal Trade Commission’s Web site at www.ftc.gov. Although the FTC will not normally intercede on behalf of an individual consumer, they act as a clearing house for complaints and have been known to initiate legal action against the most abusive collectors in the industry.

Should a Florida resident have a complaint about abusive debt collection tactics, they can file a complaint through the Florida Office of Financial Regulation (OFR), the state agency in charge of debt collectors, at www.flofr.com. In this instance, the OFR will open a file and forward the complaint to the offending agency.

If a debt collector violates the FDCPA, you can take legal action.

“You have the right to sue a collector in a state or federal court within one year from the date the law was violated,” the FTC said. “If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.”

Whether you receive an annoying or harassing call from a telemarketer soliciting a product or charity, or a debt collector attempting to collect a debt, you can stop your phone from ringing by simply learning your rights.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.