TaxMasters Goes Bankrupt

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.