Tax Masters Declares Bankruptcy

On March 16, Tax Masters declared bankruptcy. Later that month, a Texas jury found Tax Masters guilty of 110,383 violations of the Texas Deceptive Trade Practices Act. The company and its CEO Patrick Cox were ordered to pay the defendants, their deceived customers, $113,099,820 for the money they gave to the company and $1,045,998 for the defendants’ legal fees. This comes to a total of over $195 million.

As ABC News reported in April of last year, Tax Masters repeatedly lied to their customers. They promised that they could reduce your debt to the IRS to “pennies on the dollar,” and that they were “97% successful.” Neither claim was true. They took money from people they did not help. While their offices filled with cases that went unnegotiated, their clients’ debt grew from penalties and interest.

Tax Masters owes a substantial amount of money to several companies that will likely not be paid as a result of its bankruptcy. Below are some of the companies that Tax Masters owes money to and the amount of money they will now likely be without.

CNN                                                                          $2,600,000

Maxximedia (Houston advertising firm)                $1,326,676
Fox News                                                                  $938,414
American Express                                                    $679,497
Westwood One                                                        $676,000
History Channel                                                       $653,820
MSNBC                                                                      $259,441
Yahoo                                                                        $196,475
The Weather Channel                                              $172,233
The Discovery Channel                                             $136,850
ESPN                                                                           $94,265

For almost a year after ABC’s investigative report, CNN, Fox News, and MSNBC each profited from allowing Tax Masters to lie to their viewers hundreds of times. These news organizations allowed a fraudulent company to lure their viewers into a situation that could cause them real economic hardship. A company’s responsibility doesn’t end at the door of its business office. They transferred their credibility to a liar and in so doing committed a serious breach of journalistic ethics.

h/t Mediaite