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Texas tax company leaves consumers in limbo

The face on the commercial became a familiar one as the founder of the Texas company, Tax Masters, told viewers that they need not worry about the money they owe to the IRS. This week, it was announced that TaxMasters filed for bankruptcy under Chapter 11 of the bankruptcy code. For current and potential customers, it points out the importance of hiring reputable tax relief companies.

According to a news report, TaxMasters has been the subject of many customer complaints. In 2010 the state of Texas filed a lawsuit against the company for violations of the Texas Deceptive Trade Practices Act. Even though the company was aware of the pending trial, customer complaints continued to roll in, including one from a woman who alleged that she paid the company $3,000 and received nothing in return.

The IRS is very specific about filing deadlines. If a deadline is missed, penalties and interest can add up. One of the complaints reportedly made by TaxMasters' customers was that the company did not inform them that they would not begin working on a tax case until the fee, paid in installments, had been paid in full. This meant that important IRS deadlines may not have been met in some instances.

It was further reported that when a potential customer called the company for help with IRS back taxes, that they did not speak to a tax professional, but instead, were directed to a sales person, who was not qualified to give tax advice.

In this case, the trust that consumers placed in TaxMasters, may not yield actual positive results. According to the bankruptcy filing, the company has $50,000 in assets and $1 million to $10 million in debt. Unfortunately, their customers who still owe money to the IRS may need to go elsewhere for their tax relief solutions.

Source: KHOU.com, "Houston-based TaxMasters Inc. files for bankruptcy," Jeremy Rogalski, March 19, 2012

1 Comment

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