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About TaxMasters
TaxMasters is a private U.S. company offering tax debt resolution services for U.S. taxpayers. The tax representation firm is based in Houston, Texas and currently employs over 200 people.

''TaxMasters is not a CPA firm. TaxMasters in not a law firm.''

Company founding and marketing
Complaints about the IRS are not new. Congress held hearings in the 1990s to investigate some of the more egregious complaints and to better understand the nature of how the IRS collects revenue. The result of the congressional hearings was RRA '98, signed into law by President Bill Clinton. Part of RRA '98 was a Declaration of Taxpayer Rights. . Article IV. of the Taxpayer Bill of Rights gives taxpayers the right to representation when dealing with the IRS.

Patrick Cox, a Certified Public Accountant, started TMIRS Enterprises, Ltd, doing business as TaxMasters, in 2001 when he saw an opportunity to expand into the tax representation field. He began advertising in the Houston, Texas market on television and radio in 2002. Advertising campaigns have since gone national.

The company is perhaps best known for the television commercials that run on cable networks across the U.S., including Fox News Channel and CNN, many of which feature the President of TaxMasters, Patrick Cox.

Celebrity endorsements include Bill O'Reilly, Dennis Miller, and Laurie Roth.

Business model
TaxMasters provides tax representation services to taxpayers using a loss leader business model, pioneered by American businessman King Gillette. TaxMasters takes a loss on the initial free tax consultation in order to assess a taxpayer’s situation and recommend steps moving forward. When a potential customer agrees to purchase services, the TaxMasters team begins working with the Internal Revenue Service (IRS) on the taxpayer’s behalf. Typical goals of a tax representation firm are to help a client regain compliance with the IRS, negotiate a settlement on taxes owed, and negotiate installment agreements to pay delinquent tax.

Basic tax resolution process
TaxMasters follows the same basic process with each client to ascertain the client’s total tax debt and develop a tax resolution strategy. A Tax Consultant spends time on the phone with a prospective client understanding the taxpayer’s particular tax problem. The Tax Consultant then recommends services based on the initial conversation. If the prospective client agrees to purchase services, TaxMasters files power of attorney for the client with the IRS and contacts the IRS to complete an IRS Consultation on behalf of the client. TaxMasters uses the findings from the IRS Consultation to verify the information provided by the client and to further refine a strategy to resolve the client’s tax problem. TaxMasters then contacts the client to clarify all recommended services and proceeds with resolving the case.

Controversy, complaints, and the IRS
Consumer complaints against tax representation companies are generally a result of clients requesting refunds, particularly if the refund is requested for a service that has already been rendered.

Another consistent problem with the tax resolution business in general is the nature of dealing with the IRS and some IRS agents. IRS employees themselves have reported that deceiving taxpayers is considered acceptable in the IRS if it accomplishes the goals of the agency, the principle goal being to collect revenue. IRS agents can tell a taxpayer anything to collect revenue, even untruths about tax representatives. This is a practice that can lead tax resolution clients to believe that their representative has done nothing on the case or has even made the taxpayer’s tax problem worse.

As shown with testimony and congressional investigations that lead to RRA '98, the IRS has culturally and procedurally put taxpayer rights at risk. The good news is that the IRS is trying to resolve its issues through creating programs like the Taxpayer Advocate Service.

While the Taxpayer Advocate Service pushes to make the IRS more accountable, tax resolution firms remain an option for taxpayers who have tax problems and need to pay off or settle tax debt.