Tax resolution chain TaxMasters has filed for Chapter 11 bankruptcy protection.
The firm, which widely advertised its ability to help taxpayers settle their tax disputes with the IRS in TV commercials featuring CEO Patrick Cox, filed a bankruptcy petition in Houston on Sunday, according to Reuters. The chain listed assets of less than $50,000 and liabilities of between $1 million $10 million.
The firm has been sued by the state attorneys general in both Texas and Minnesota who have accused the firm of deceptive business practices, according to Forbes. Texas officials accused the chain of refusing to perform work on behalf of clients trying to resolve their tax debts until their fees were fully paid, even if they missed IRS deadlines. Texas Attorney General Greg Abbott’s office had received over 1,000 complaints.
TaxMasters joins two other high-profile tax resolution chains, JK Harris and “Tax Lady” Roni Deutch, which went out of business in the past year amid consumer complaints and after running afoul of state attorneys general (see JK Harris Goes out of Business and “Tax Lady” Roni Deutch Closes Firm Amid Allegations). Harris’s customer records have been purchases by another tax resolution firm, Resolute Tax Services.
9 Comments
Even better is that TaxMasters was a public company. People not only did business with them as customers but also bought stock in it. I'd say that accounting firms are much like restaurants. If you go to a local one you get better quality and services but you'll pay a little more. Go with a fast food franchise and you get cheap prices but much lower quality.
Posted by: marcv | March 22, 2012 2:06 PM
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I saw this crook running TV commercials in North Carolina within the last few weeks, despite their (and the others') well-publicized legal difficulties. Unfortunately scam artists are a byproduct of deregulation, weak consumer protection laws, and unsophisticated clientele. Television is such a powerful medium and advertisers, except in regulated industries, seemingly can make any claims they wish to. Caveat emptor. Good riddance to all three of these scam masters!
Posted by: Rayo | March 20, 2012 4:09 PM
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When I was an IRS agent back in the early 2000's, I audited a company that originally contacted JK Harris for assistance. JK Harris required the fee paid up front and didn't arrange for any representaive for the company. When they asked for a refund, they said the money was already spent. Companies like this should be prosecuted for fraud. At least we're getting rid of them. Let's see what happens with the companies that took them over.
Posted by: bhanan | March 20, 2012 12:19 PM
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I think this is awesome! These guys are so horrible at business, they can't even run a profitable scam.
Posted by: gregkyte | March 20, 2012 11:55 AM
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I see the advertisments and think it must be a scam. I have clients ask me why can't I not pay my taxes and then pay less like the advertisment says. I tell them don't believe the advertisment , its a scam. 1st Roni Deusche now Tax Masters, ifs its too good to be true its a scam.
Nicholas
Posted by: neparms | March 20, 2012 9:32 AM
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All three of these "national" firms going out of business affirms how much better off clients would be to use local accounting firms with tax expertise at least as good if not better than these "national" firms. Most local firms must provide excellent cutomer serivce to stay in business. Our firm has been in business over 40 years. Our marketing is our client base referring other clients and our reputation.
Posted by: rwade1950 | March 20, 2012 9:01 AM
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Yes, there are legitimate tax resolution firms who are worth every penny they charge to help people through a stressful time and actually perform services as agreed. They are the firms left standing. I have been in this industry for 20+ years and have seen bad guys come and go throughout. The only way to remain in this business is to be qualified and honest with your clients from beginning to end and I believe, to stay small so you can control what is being told to prospects. The first sign to run the other way is if you're talking to a sales person who guarantees a reduction in tax debt for a fee in a five minute phone call! Also, check BBB ratings. All of the companies mentioned had F ratings for YEARS!
Posted by: Darla E | March 20, 2012 9:00 AM
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No, I have clients who have paid from $5000(minimum) to $20000+ with absolutely no response. Try calling the 800# and the guy answering will be named Chris, and you will have to give him credit info before an "attorney" can get back to you-I tried it.
Posted by: BRES | March 20, 2012 8:31 AM
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Sad for the tax payers who trusted this guy. I've seen his commercials, and one could think "hey, if they advertise, they must be legit!"
Are any of these "tax resolution" firms worth the fees they charge?
Posted by: bobzeitlinger | March 20, 2012 8:12 AM
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