TV Tax Fraud

Mark J. Mandell

You won’t be seeing any commercials for TaxMasters any time soon, due to a recent court decision in Texas. A jury handed down a recent verdict, finding that TaxMasters and its predecessor company had committed over 110,000 violations of Texas’ Deceptive Trade Practices Act.

TaxMasters, a Houston-based tax consultation company, misled customers with contract terms and also routinely missed IRS deadlines at their customer’s expense. The court ordered that TaxMasters pay $195 million back in damages, $46 million coming from founder Patrick Cox’s pocket, and the rest from the firm itself.

Unfortunately, TaxMasters filed for bankruptcy earlier in the month and it is estimated that they owe money to up to 5,000 separate creditors. It is speculated that the bankruptcy filing might be a way for TaxMasters to get out from under the $195 million dollar judgment. This would be a huge loss for the defrauded customers, of which $113 million was earmarked restitution for.  

Texas Attorney General Greg Abbott is still happy with the verdict, stating:

“[The] decision marks a significant victory for the Texans and TaxMasters customers nationwide who sought help from TaxMasters with their income tax debts and were taken advantage of in the midst of a national economic downturn."

If you have been the victim of a fraud scheme, contact Mark Mandell at (248) 380-9976 for help.

To learn more or see the original article, please visit: http://money.cnn.com/2012/03/30/news/companies/taxmasters-fraud/index.htm