Tax Resolution Firm Tax Masters Files for Chapter 7 Bankruptcy Following Court Battle

May 22, 2012 - Lansing, MICH. - On May 7th, Tax Masters, a national tax resolution firm, filed to convert from Chapter 11 to Chapter 7 bankruptcy. The conversion to Chapter 7 bankruptcy will stop all operations, forcing the firm out of business.

In April, after an eight day trial, a Texas jury decided to hit the tax advisory firm Tax Masters and its CEO Patrick Cox with $195 million in customer restitution and civil penalties. Cox and his firm were accused of defrauding consumers in addition to violating the Texas Deceptive Trade Practices Act.

Cox, appearing regularly on cable TV advertisements for his firm, became a household name. In the ads, he promised consumers protection by guiding them through audits, ending tax disputes and recovering property seized by the IRS. Amid speculation, Texas Attorney General Greg Abbott filed a lawsuit stating that the company's claims were false.

"The Tax Masters CEO made hollow promises about fighting for taxpayers and their pocketbooks in television ads," said Abbott. "The evidence proved that the firm didn't even bother to show up when it came time to fulfill those promises."

Abbott claims that Tax Masters led consumers to believe it would work on a cases immediately, when in truth it would delay work until a client's fees were fully paid, even if that meant missing IRS deadlines. Despite these claims, individuals in need of tax help are encouraged to seek assistance, but through reputable tax resolution firms.

"We understand that dealing with the IRS can be intimidating," said Jesse Lothamer, founder of Lothamer Tax Resolution. "But it's critical to protect yourself against fraudulent tax representation. We encourage consumers to seek out trustworthy representation to resolve their tax problems – a service we've been offering for over 30 years."

Lothamer is a professional firm of Certified Public Accountants founded by Jesse I. Lothamer, J.D., C.P.A. in 1978. The firm specializes in Tax Representation and Tax Problem Resolution, and has helped thousands of clients settle their tax problems with the IRS and State of Michigan. With offices across the State of Michigan, Lothamer is Michigan's leading Tax Resolution Firm, and will continue to provide the general public with tax representation and tax problem resolution for a wide variety of tax problems.