Taxmasters Files for Chapter 11

Houston-based Taxmasters Incorporated has filed for bankruptcy protection, following a legal challenge from Texas prosecutors who say the company's TV commercials mislead potential investors. 

Taxmasters filed Chapter 11 reorganization documents in federal court on Sunday. The filing says the tax resolution company has assets of less than $50,000. It estimates the company's liabilities at a minimum of $1 million and possibly as high as $10 million.

The state is suing Taxmasters for violating the Texas Deceptive Trade Practices Act. It says Taxmasters commercials encourage people to call for a free consultation with a tax specialist. Prosecutors say the calls are answered by salespeople unqualified to provide tax advice.

Company founder and president Patrick Cox fronts the company's national advertising campaign.

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...