Taxmasters (TAXSQ) 8-K Taxmasters, Inc. Announces Financial Results for 2009

For Immediate Release:

TAXMASTERS, INC. ANNOUNCES FINANCIAL RESULTS FOR 2009

HOUSTON, TX – April 19, 2010— TaxMasters, Inc. (OTC Bulletin Board: TAXS), today announced the company’s financial results for the year ended December 31, 2009.

For the year ended December 31, 2009, TaxMasters’ net revenue increased by approximately $20.9 million, or 131.8%, to approximately $36.8 million, compared to approximately $15.9 million for 2008.

Total operating expenses for the year ended December 31, 2009 were approximately $37.2 million, an increase of approximately $17.3 million, or 86.9%, from total operating expenses of approximately $19.9 million for the same period in 2008.

For the year ended December 31, 2009, the company reported net loss from operations of $437,707, a decrease of approximately 89.2% from a net loss from operations of $4.05 million for the same period in 2008.  For the year ended December 31, 2009, the company had a net loss before income taxes of $560,604, a decrease of approximately 86.2% from a net loss before income taxes of approximately $4.06 million for the same period in 2008.

For the year ended December 31, 2009, the company reported net income of approximately $4.8 million, or $0.02 per share, versus a net loss of approximately $4.06 million or $(0.01) per share for 2008.  This reduction in loss is mainly due to the $20.9 million increase in sales revenue offset by increases in compensation costs and advertising expenses.

“We are pleased with our continued growth in revenue and our improving operational efficiency as evidenced by the significant decrease in our net loss from operations in 2009 versus 2008,” said Patrick Cox.  “The economic downturn, coupled with increased collections efforts by the Internal Revenue Service has created a growing demand for help with tax problems. This demand was reflected in our growth in 2009 – both in terms of revenue and personnel we hired. Thousands of tax payers across the United States reached out to TaxMasters during 2009 for help with filing past due returns, negotiating settlements with the IRS and coming back into tax compliance.”

Cox continued, “The year marked TaxMasters’ entry into public markets, trading under the ticker symbol TAXS. This has provided us access to increased capital and the ability to grow with the market demand for our services. So far, we have seen an increased demand for our services in the first quarter of 2010, and we believe that revenue for 2010 will exceed that of 2009.”

Cox concluded, “Looking forward, we will continue to aggressively market our company and services via national advertising to increase our revenue growth even further, while prudently managing increased operating expenses and looking to maximize efficiency. We believe that this strategy will result in significant revenue growth over the next year, and eventually lead to growth in net income.”

In conjunction with this release, TaxMasters will provide an audio review of financial results of the year ended December 31, 2009 via its website at www.txmstr.com. The review will be available for download and review on April 29, 2010. For a transcript of a review, please email your request to taxmastersIR@gregoryfca.com after April 29, 2010.

About TaxMasters, Inc.

TaxMasters, Inc. (OTCBB: TAXS), the IRS tax relief company, is the first publicly traded tax resolution firm in the United States.  Started by Patrick R. Cox in 2001, TaxMasters offers services and counsel to taxpayers across the country facing seemingly insurmountable tax problems, and relief from substantial federal tax debt.

Employing over 300 people, TaxMasters leverages the expertise of ex-IRS agents, enrolled agents, attorneys, CPAs, and seasoned tax consultants ready to counsel and assist every day people with their specific tax problems today.

For more information about TaxMasters, Inc. and its commitment to help taxpayers in the United States solve tax problems, please visit www.txmstr.com.

Follow TaxMasters on Twitter at http://twitter.com/gotaxmasters.

Visit TaxMaster’s blog at http://www.txmstr.com/blog/

Forward-Looking Statements

Any forward-looking statements, as defined in the Securities Exchange Act of 1934, in this release (often identified by such words as "believes," "expects," "beginning," "intended," "planned") regarding future expectations, objectives, and plans for TaxMasters, Inc. are based on opinions and estimates of management at the time the statement was made. Various known and unknown factors may cause actual results to be materially different from the expected outcomes. TaxMasters, Inc. does not, as a matter of policy, update or revise forward-looking statements. Actual results may vary materially.

Company:	Investors/Media:
TaxMasters, Inc., Houston	Gregory FCA Communications
DeWayne Logan	Paul Johnson
281.497.4226 x2061	610.228.2113

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TaxMasters, Inc.
(Formerly known as Crown Patrners, Inc.)
BALANCE SHEETS
	As of December 31,
	2009			2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,892,895		$	3,683,467
Short-term investments		313,663			306,414
Accounts receivable trade, net		11,426,037			5,722,585
Deferred tax asset		1,654,130			-
Prepaid expenses		125,000			-
Total current assets		16,411,725			9,712,466
Property and equipment, net		2,533,387			192,074
Note receivable		250,000
Investments		423,968			413,168
Deferred tax asset, net of current		3,709,430
Other Assets		17,000			17,000
TOTAL ASSETS	$	23,345,510		$	10,334,708
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable	$	3,099,427		$	1,178,432
Accounts payable related parties		117,673			240,000
Accrued Liabilities		2,448,783			466,452
Deferred revenue		20,478,350			8,942,759
Capital lease obligation		568,562			71,706
Note payable to related party		4,582,718			-
Total current liabilities		31,295,513			10,899,349
LONG TERM DEBT
Capital lease obligations, net of current portions		1,708,588			139,193
Deferred revenue, net of current portion		-			6,656,216
Total liabilities		33,004,101			17,694,758
COMMITMENTS AND CONTIGENCIES
STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value,
500,000,000 shares authorized, 1,000 shares issued
and outstanding at December 31, 2009 and December 31, 2008		1			1
Common stock, $0.001 par value, 1,000,000,000
authorized, 339,675,899 and 301,000,000 shares issued and
outstanding at December 31, 2009 and December 31, 2008, respectively		339,676			301,000
Additional paid-in capital		199,768			(301,001	)
Accumulated deficit		(10,198,036	)		(7,360,050	)
Total stockholders' deficit		(9,658,591	)		(7,360,050	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	23,345,510		$	10,334,708

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TaxMasters, Inc.

(Formerly known as Crown Partner, Inc.)

STATEMENTS OF OPERATIONS

	For the years ended December 31,
	2009			2008
REVENUES, net	$	36,777,024		$	15,866,393
OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses		18,891,317			11,153,787
Compensation		18,082,066			8,656,832
Depreciation		241,348			106,637
Total operating costs and expenses		37,214,731			19,917,256
NET INCOME (LOSS) FROM OPERATIONS		(437,707	)		(4,050,863	)
OTHER  INCOME (EXPENSE):
Interest income		39,030			28,850
Interest expense		(161,927	)		(38,757	)
Total other income (expense)		(122,897	)		(9,907	)
NET  INCOME (LOSS) BEFORE INCOME TAXES		(560,604	)		(4,060,770	)
Income tax benefit		(5,363,560	)		-
NET INCOME (LOSS)	$	4,802,956		$	(4,060,770	)
EARNINGS PER COMMON SHARE
Basic	$	0.02		$	(0.01	)
Diluted	$	0.02		$	(0.01	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Basic		316,712,298			301,000,000
Diluted		316,712,298			301,000,000

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TaxMasters, Inc.

(Formerly known as Crown Patrners, Inc.)

 STATEMENTS OF CASH FLOWS

	For the years ended December 31,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	4,802,956		$	(4,060,770	)
Adjustments to reconcile net income to net cash provided by
operating activities:
Change in deferred tax asset		(5,363,560	)		-
Depreciation and amortization		241,347			106,637
Deferred rent		464,231			-
Common stock issued to employees for service		534,495			-
Common stock issued to non-employees for service		4,950			-
Notes payable write-off		400,000			-
Changes in operating assets and liabilities:
Accounts receivable		(5,703,452	)		(3,187,453	)
Prepaid service		(125,000	)		-
Accounts payable and accrued liabilities		3,439,099			833,322
Accounts payable to related parties		(122,327	)		-
Deferred revenue		4,879,375			10,639,141
Net cash provided by operating activities		3,452,114			4,330,877
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts (Purchase) of investments, net		(18,049	)		(719,582	)
Issuance of note receivable		(650,000	)		-
Purchase of fixed assets		(284,969	)		-
Net cash used in investing activities		(953,018	)		(719,582	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of capital lease obligations		(231,444	)		(96,925	)
Repayment, net of accrued interest, of note payable to related party		(732,130	)		-
Distributions to shareholders prior to conversion to C corp		(2,326,094	)		(1,481,416	)
Net cash used in financing activities		(3,289,668	)		(1,578,341	)
NET CHANGE IN CASH AND CASH  EQUIVALENTS		(790,572	)		2,032,954
CASH AND CASH EQUIVALENTS—Beginning of year		3,683,467			1,650,513
CASH AND CASH EQUIVALENTS—End of period	$	2,892,895		$	3,683,467
Supplemental schedule for cash flow information
Cash paid for taxes	$	-		$	-
Cash paid for interest	$	117,906		$	38,757
NON CASH INVESTING AND FINANCING ACTIVITIES
Purchase of property and equipment by seller financing	$	2,297,594		$	135,814
Issuance of note payable to related party due to conversion from S to C corp	$	5,314,848		$	-

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