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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Comments (2)
  1. Angela Yepez says:

    It is sad to see organizations like Tax Masters take advantage of people when they are in their most vulnerable state. It puts a bad taste in people’s mouths about the tax relief industry as a whole. Even the Federal Trade Commission dubs most tax relief companies frauds and scams. But there are tax debt firms that aren’t scams, like Tax Defense Network. My sister got into trouble with the IRS, and even though I was skeptical (like many people are) about the actual “help” tax relief companies provide, it was refreshing to find Tax Defense Network was not a scam. She researched their BBB rating and found TDN has an A rating, which is extremely hard to find in this fraudulent industry. My sister wasn’t charged upfront fees by TDN like scams usually do. Between companies that do a terrible job, and ones that are blatant scams and frauds, Tax Defense Network stands for integrity. It’s unfortunate that people do not know about companies like TDN and are subjected to the scam businesses like Tax Masters.

    1. ROb says: