Two weeks ago we discussed the bankruptcy and legal troubles of TaxMasters, a national tax firm. That blog post noted that the company had settled a lawsuit filed by one state attorney general, but that it still faced another. That other suit came to a conclusion last week when a jury in the company's home state found that its practices repeatedly contravened the state's Deceptive Practices Act.
Many California taxpayers have undoubtedly seen the television advertisements for large-scale tax firms that promise aggressive representation in tax cases with the Internal Revenue Service. Two of those firms, however, have already gone bankrupt, and a third sought bankruptcy protection this week.
While many people dread the approach of the April 15 deadline for filing their tax returns, many California residents also eagerly anticipate the reward: a federal tax refund. But for taxpayers completing a repayment plan under Chapter 13 of the Bankruptcy Code, the refund has been taken away in one judicial district in Michigan.