TaxMasters

Customer Complaints Summary

Additional Complaint Information

The Bureau has attempted to contact the company at the following addresses and has received returned mail from each of the address listed below as of today:

900 Town and Country Lane Ste. 400
Houston TX 77024

1011 Highway 6S Ste 306
Houston TX 77077







This company has an unsatisfactory report for a pattern of complaint activity regarding service issues and unanswered or unresolved complaints.  BBB complainants allege they are required to pay for the company's service before the company releases a copy of the contract and their policies for the consumer to review and sign. Numerous complaints alleged that after collecting an advance fee, Taxmasters failed to provide the promised tax relief and refused to the advance fee consumers paid them. TaxMaster's has stated that it does not guarantee the outcome of a negotiation, but states that they do not charge a fee for the negotiation if the negotiation fails. 

In 2011, the BBB noted complaints which alleged the company offered payment plans to customers its for services, but never informed customers that services would not begin until the company had been paid in full. As of February 2012, the BBB noted the Taxmasters website does disclose that it doesn’t have to work on a customer’s account until the firm has received its entire fee. It also states that that work may not necessarily be done by a “tax expert” or “professional.”

As a general rule, the BBB recommends consumers ask any company they are doing business with about their refund, return, and/or exchange policy in advance of authorizing payment. The company has stated that their refund policy is clearly stated to new clients and is discussed on the company's website on their disclaimer page (htt://www.txmstr.com/disclaimer/) as well as outlined in the agreement with its clients.

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• Government Actions

  Houston-Based TaxMasters and Founder Patrick Cox Ordered to Pay Over $195 Million For Defrauding Customers in Texas and Nationwide
  Date of Action: 3/30/2012
  On March 30, 2012, Texas Attorney General Greg Abbott released the following statement after a Travis County jury returned a $195 million verdict against Houston-based TaxMasters, Inc., its predecessor companies and its founder and chief executive officer, Patrick Cox, for violating the Texas Deceptive Trade Practices Act:
  
  “Today’s 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. While the TaxMasters CEO made hollow promises about fighting for taxpayers and their pocketbooks in television ads, the evidence proved that the firm didn’t even bother to show up when it came time to fulfill those promises, but instead misled and defrauded their customers.”

  In an apparent effort to avoid the State’s enforcement action, TaxMasters filed for Chapter 11 bankruptcy protection just one day before the jury trial was set to begin. Citing the firm’s bankruptcy petition, TaxMasters CEO Patrick Cox sought to delay the trial, but his request was denied and the trial proceeded as planned. After an eight-day trial, the jury found that TaxMasters, its predecessor companies and Patrick Cox committed over 110,000 violations of the Texas Deceptive Trade Practices Act and ordered the defendants to pay a total of over $195 million. Of that, over $113 million is restitution for fees TaxMasters’ customers paid to the firm, and $81 million was further awarded in civil penalties.
  
  Breakdown of the verdict
  
  • Consumer restitution: $113,099,820
  • Civil penalties: $81,205,000
  • Attorney fees: $1,045,998
  • Number of Violations: 110,383
  
  Facts of the case
  
  • The State’s enforcement action against TaxMasters, Inc. was filed in May 2010.
  • According to the State’s enforcement action, 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 customers 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 customers 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.
  • From 2005 to 2012, the Texas Attorney General’s Office received 891 consumer complaints against TaxMasters.
  • The case was handled by Assistant Attorneys General Nanette DiNunzio, Bruce Griffiths and Jennifer Roscetti. The trial team also consisted of legal assistants Pam Yediares and Pauline Sisson.
  
  NOTE: The Texas Attorney General’s Office will actively participate in the bankruptcy case to seek to recover restitution for customers.

  What government actions does BBB report on?

• Advertising Review

  BBB has nothing to report concerning TaxMasters's advertising at this time.

  What is BBB Advertising Review?