TaxMasters Bankruptcy Update and Caption Contest!

Remember when I stated that TaxMasters had secured $25 Million in funding?

Well, now I’m kind of wondering where all those millions went. Did they already empty it into their advertising budget (which takes up about 37% of their spending)? That may be the case, because TaxMasters has filed for bankruptcy (TaxMasters Inc., 12-32065).

Due to the many lawsuits spearheaded by several attorneys general, TaxMasters has been a sinking ship. TaxMasters promised the world to worried taxpayers, just like JK Harris and Roni Deutch did. Much more often than not, the company completely failed to follow through on their promises. In fact, it did little at all to help their clients through their difficult situation. They refused to do any work until the client was paid in full, which often resulted in missed deadlines and aggressive IRS collection actions.

I guess they should have applied a higher percentage of their budget to competent tax attorneys, CPA’s, and enrolled agents. The infamous, red-bearded tax resolution company has reported that they owe $1-$10 Million in debt to somewhere between 1,000 to 5,000 creditors. You would think $25 million might have covered that…….but it seems that TaxMasters has less than $50,000 in assets. No wonder this company was crummy handling other people’s tax problems. It can’t even balance its own budget.

I think this finally puts to bed the rumor many of my competitors have been spreading that a BBB rating is not a reflection of a company’s performance. Let’s take a look at the following companies that have been forced to shut their doors for good due to their unscrupulous practices:

American Tax Relief

• F rating with the BBB (not accredited)
• The FTC forced it to shut down for criminal activities.

Roni Deutch

• Currently “No Rating” – Formerly F rating with the BBB (not accredited)
• The “Tax Lady” was forced to give up her practice by the government.

JK Harris

• F rating with the BBB (not accredited)
• Forced to shut its doors due to the inability to pay back its creditors and get adequate funding to restructure the company.

As for TaxMasters, declaring bankruptcy doesn’t mean it is necessarily closed. Just look at how long JK Harris operated after it filed. However, I do believe we are looking at the last days of being forced to look at Patrick Cox’s awkwardly turned head on sleazy midnight ads. However, there are other less famous companies out there that are just as unethical. Remember these tips when looking for the best help: