Minn. Sues Firm Over Claims Of Help With Tax Debts

ST. PAUL, Minn. (AP) -- Minnesota Attorney General Lori Swanson is suing TaxMasters Inc., a company that runs frequent TV ads promising to help consumers struggling with tax debt.

The lawsuit filed Thursday alleges that the Houston-based company collected up-front fees of as much as $8,000 while falsely claiming it could reduce tax debt by as much as 90 percent and stop the IRS from garnishing wages or making other collection efforts.

Swanson says most people don't qualify to reduce tax debt but the IRS will work directly with consumers on payment plans.

Attorney Chris Madel says TaxMasters has tried to work with Swanson and hopes to resolve the lawsuit quickly.

The lawsuit filed in Hennepin County District Court alleges consumer fraud and deceptive trade practices. Swanson is seeking restitution for consumers and civil penalties.

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