HOUSTON—When TaxMasters went bankrupt after losing a $195 million trial for misleading the public, it left thousands of customers in limbo with outstanding tax issues.
Now those former clients are getting some help.
The Texas Attorney General’s office has helped to set up a free advice hotline at the University of Houston Center for Consumer Law. TaxMasters clients can call 877-839-8422.
In March, a Travis County jury returned a $195 million verdict against the Houston-based company. In all, it found that over $110,000 violations of the Texas Deceptive Trade Practices Act were committed and awarded consumers more than $113 million in restitution.
The so-called “tax resolution” firm misled Texans by aggressively advertising its services to federal taxpayers who have received notice from the IRS of an audit, garnishment, lien, levy or tax deficiency. TaxMasters misled clients about their service contract terms, failed to disclose its no-refunds policy, and falsely claimed that the firm’s employees would immediately begin work on a case – despite the fact that TaxMasters did not actually start to work on a case until its clients paid in-full for services, even if that delayed response meant taxpayers missed significant IRS deadlines.
TaxMasters also failed to contact and consult with the IRS on the client’s behalf, appear on the client’s behalf at an IRS audit or hearing, or postpone or stop a wage or bank account garnishment, or stop a levy or lien against a client’s property.
Over the next few weeks, all former TaxMasters clients will receive a letter from the Chapter 7 Trustee detailing all relevant information about the bankruptcy case and their rights.