State Lawsuit Pushes Taxmasters into Bankruptcy

The filing says Taxmasters has assets of less than $50,000. It estimates the tax resolution company's liabilities at a minimum of $1 million and possibly as high as $10 million.

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

"The former IRS agents and tax professionals at Taxmasters will solve your tax problems, will get between you and the IRS, will make sure they treat you fairly and treat you with respect."

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.

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