The Houston based TaxMasters filed for Chapter 11 Bankruptcy this past Sunday. TaxMasters is well-known for its TV and radio advertisments which feature its CEO Patrick Cox. These advertisements made claims of being able to settle IRS tax debts for pennies on the dollar.
TaxMasters filed their bankruptcy petition in Houston. It claimed that TaxMasters owes creditors between $1 million and $10 million, and that its assets total only $50,000 or less. TaxMasters is also estimated to owe between 1,000 and 5,000 creditors.
TaxMasters had recently settled with the state of Minnesota for deceptive business practices and agreed to pay $500,000 to the state. A similar lawsuit is currently being brought in Texas as well.