Houston-based tax firm faces charges

HOUSTON The Texas attorney general claims the company is not upfront with its customers. According to the AG, TaxMasters, Inc., based in Houston, used a nationwide marketing campaign to offer services for distressed taxpayers who need help dealing with the IRS.

But according to the lawsuit, TaxMasters, as well as its founder Patrick Cox, engaged in deceptive practices. The lawsuit contends the company demanded fees, sometimes in the thousands of dollars, upfront and never informed the consumer that they could not get a refund.

The lawsuit also claims the company would not do services until the fees were paid, forcing customers to miss important tax deadlines. The lawsuit even claims that services promised were sometimes not even done even after payments had been made. We heard from one alleged victim who lives in The Woodlands.

"It was horrible," said alleged victim Arch Currid. "After I hung up the phone with Mr. Lopez I never was able to get anyone else on the phone."

"What we're seeking the court to do is to issue an order that ends these abusive practices," Texas Attorney General Greg Abbott explained. "One is they need to provide information to their customers upfront before they attempt to bind them to a contract. Two, they need to inform them upfront, before they charge them any money."

We received a response to the lawsuit from TaxMasters, which reads, "We recently received a complaint from the Texas Attorney General. We are currently in the process of reviewing it at this time. We intend to work very closely with the Texas Attorney General on resolving any problems listed in the lawsuit."

A hearing on these claims is scheduled in Travis County.

Click here to read the AG's lawsuit against TaxMasters.

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