TaxMasters Accused of Fraud and Deception

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"When you pay these upfront, advanced fees, now you're signed up, you're stuck, and the promised help doesn't materialize," she told ABC News.

Audio tapes of some sales calls, turned over to the attorney general by TaxMasters, prove the point, she says.

Salespeople tell potential customers TaxMasters is 97 or 98 per cent successful in reducing the amount of taxes owed.

"You're owing $19,000," the TaxMasters salesman tells a customer on a recording provided to ABC News by the attorney general.

Click Here To Listen To The TaxMasters Sales Call

"I mean we can get you down to basically next to nothing," he continues. "I think we are the most successful tax resolution company. We're 97 per cent successful," the salesman says.

"Not true," said Attorney General Swanson. "It's another falsehood of this company. These salesmen tell people that to sign them up, but they don't deliver on those promises."

The IRS says only a small number of taxpayers ever qualify for such a substantial reduction in taxes owed.

On another tape, a salesperson promises that IRS collection action will cease once the customer signs up and pays a fee to TaxMasters.

"It's automatic, that's what the IRS consultation does, it pulls your name, it pulls your number out of the collection process," the salesman said on the tape.

Click Here To Listen To The TaxMasters Sales Call

IRS Adds Tax Penalties

IRS officials say it is not "automatic" that the collection process stops if someone hires TaxMasters. The company has to file a variety of documents with the government to do so.

"In fact, when you hire this company, sometimes the situation even gets worse," said Attorney General Swanson. "They may garnish you, they may put down liens," she told ABC News.

Charlene Lee of Plymouth, Minnesota says she ended up owing more in penalties and interest after she paid TaxMasters $4800 to help her with a tax bill she could not pay.

Lee says it took TaxMasters months to get to her case, only to have the IRS reject the settlement offer submitted by the company. The IRS continued to add thousands of dollars in interest and penalties during the time TaxMasters was supposedly helping her.

"Isn't that wonderful," said Lee, a mother of two who says she feels victimized by TaxMasters and Cox.

"Shame on you, for doing this to families," she said in a comment she hoped Cox would hear.

Authorities in Minnesota and Texas say they have received hundreds of complaints from former TaxMasters customers.

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In his statement, TaxMasters president Cox said, "It is not surprising that ABC News dug through the tens of thousands of taxpayers we have spoken with over the years and found a few individuals willing to complain on camera."

Cox said he could not comment on specific cases cited to him by ABC News, but said they "are not a fair representation of TaxMasters' client base or business practice."

What You Should Do If You Owe Back Taxes

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