Pump and Dump alert from "Penny Stock Research"

Below is somthing I saw on the Internet today on a website that issues advice on penny stocks. 




http://www.pennystockresearch.com/nsrs-gpls-taxs-pump-and-dump-alerts-january-27-2012/


NSRS, GPLS, TAXS – Pump And Dump Alerts – January 27, 2012


By: Brian Walker - January 27, 2012
Filed in: Pump & Dump Alerts

This week we’re exposing these three popular Pump & Dumps: North Springs Resources (NSRS), Geopulse Explorations (GPLS), and TaxMasters (TAXS).
That said, welcome to Pump and Dump Friday, where every week we highlight a few of the “bogus” promotions that are going on in penny stocks.
If you don’t know how these scams work, be sure to check out this free report that exposes the whole thing.
Now without further ado, here are this week’s disasters waiting to happen:

TaxMasters (TAXS)

You’ve got to love a company dedicated to fighting the greedy, over-reaching hand of the IRS. I’m already feeling the ink being sucked from my checkbook as tax season nears.
If you were to believe Research Driven Investors, you’d think TAXS was the greatest company ever. Considering the pumper was paid over $50,000 to promote shares of TaxMasters, they’d better make you love TAXS.
Well, I like TaxMasters IRS-fighting concept, but I’m not a fan of how TAXS is handling their own finances….
In November of last year, TAXS announced their previous financial reports dating back to 2009 shouldn’t be relied upon. Call me crazy, but it’s not very reassuring when a “tax fighting” company can’t even keep their own books straight!
The info page 2 of their November 28th 8-K speaks for itself…

“… as amended on September 16, 2011, the registrant’s board of directors concluded that the previously issued financial statements for the fiscal year ended December 31, 2009 and 2010, for the first, second and third quarters of 2010 and the first quarter 2011 should no longer be relied upon. Additional information concerning these financial statements has been developed…”

That’s some scary stuff… you never know the end result in matters like this.
However, after digging deeper, I found the reason behind the misstated earnings. It has to do with issuance of restricted shares that took place in 2010 as part of compensation for public relations.
Back then, TAXS retained their own independent valuation firm to value these restricted shares. And initially, the firm said the four million restricted shares were worth $356,014. But as it turns out, the shares were closer in value to $2.5 million!
Can you say ooops?
I don’t know what’s really going on over there at TaxMasters, but I’d steer clear of any company with restated financials. No matter the outcome, there are always better places you can invest!

 

Taxmasters - News story from the internet today

(picture from ABC news story referenced below)

http://goingconcern.com/2011/10/will-jk-harris-and-taxmasters-join-the-tax-lady-in-the-late-night-tax-problem-solver-body-count/


Below is an op-ed from the above link:


Will JK Harris and TaxMasters Join the Tax Lady in the Late-Night-Tax-Problem-Solver Body Count? By Joe Kristan

 

“Pennies on the dollar” may be a great pitch on cable television, but it’s not a surefire business plan. Desperate taxpayers who have paid money up front to JK Harris to resolve their tax debts at a discount are joining the IRS as potential “pennies on the dollar” creditors now that this leader in the tax settlement industry is filing for bankruptcy protection.
This is the second major blow this year to cable TV ad revenues. Earlier this year “Tax Lady” Roni Deutch gave up her law license in the face of charges that she took fees up front to resolve tax debts and failed to follow through.
Tax nerds see the late night ads when we get home and wonder how these outfits manage to get such great deals out of the IRS when getting the Service to actually forgive tax debts is like pulling teeth from a grumpy rhino for the rest of us.

TaxMasters now stands as the biggest remaining player in the TV tax settlement business, but they have their own problems. They were de-listed last month from the OTC Bulletin Board to the pink sheets for failing to file their 10-Q due August 15. The last reported trade for Taxs.pk is at 13 cents. They have also been sued by the Minnesota Attorney General for allegedly deceptive practices. ABC News reported on the suit:

The Minnesota attorney general says many of the company’s employees are skilled tele-marketers who have little knowledge of the complicated tax issues faced by people who have fallen behind in filing their returns or making tax payments. “When you call, you think you’re talking to a tax professional,” said Swanson. “You’re really talking to just a salesperson who’s trying to get you to sign up.”

So maybe the secret is that the late night settlement outfits are staffed by telemarketers who just happen to be awesome at selling pennies-on-the-dollar deals to the IRS. If that’s true, though, they seem to be having a lot of trouble turning what would truly be a remarkable and valuable skill into profits.