American Tax Service's operators surrender over $8 million after FTC and Nevada sue over impersonation and 'pennies on the dollar' claims
In October 2025 the FTC and the State of Nevada sued American Tax Service LLC, seven affiliated entities and operators Terrance Selb and Tyler Bennett, alleging they impersonated the IRS and state tax authorities, promised to settle back taxes for "pennies on the dollar," and pocketed tens of millions of dollars while doing little of the promised work. A federal court froze the operation; in June 2026 Selb and Bennett settled, surrendering over $8 million in cash and additional assets against a suspended $77.7 million judgment.
- Year
- 2025
- Where
- United States
- Outcome
- Settled
- Victims
- Not stated in the sources
- Schemes
- Tax debt relief scams
- Last reviewed
- 2026-09-28
The facts, as recorded
- The FTC and Nevada filed the complaint on October 17, 2025 in the US District Court for the District of Nevada (Civil Action No. 2:25-cv-01894), naming American Tax Service LLC, seven affiliated entities, Terrance Selb and Tyler Bennett; a federal court temporarily halted the defendants' operations the same day with an asset freeze, and entered a preliminary injunction on November 20, 2025.
- The FTC alleged the defendants falsely claimed they could settle taxpayers' back taxes for 'pennies on the dollar' or a 'fraction' of what was owed, often before evaluating the taxpayer's circumstances, and impersonated the IRS and other government agencies through letters designed to look like official correspondence.
- According to the FTC, some consumers said ATS sales representatives claimed the IRS was investigating them or had 'red flagged' their account or marked it as 'high risk'; once consumers paid, the operators allegedly did little, if any, of the promised work and rarely obtained the promised results.
- The FTC's June 2026 settlement announcement said the scheme ran from February 2022 to 2025 and alleged the defendants targeted older consumers with fictitious add-on services costing tens of thousands of dollars and sent threatening debt-collection messages.
- In the June 2, 2026 stipulated order, Selb and Bennett were banned from debt relief services, tax preparation, outbound telemarketing and impersonating governments or businesses, and agreed to a $77.7 million judgment that is suspended except for over $8 million in cash and additional assets they surrendered for consumer refunds; the judgment becomes due if their financial disclosures were false.
- As of May 7, 2026 the plaintiffs had moved for default judgment against the corporate defendants, which had not responded to the lawsuit, according to the FTC's case page.
Why this case matters
It is the most recent federal case on this page and shows the modern version of the pitch: not just a “free consultation” advert, but letters engineered to look like government mail, followed by frightening claims about the taxpayer’s account. It also shows how the money is recovered, a very large judgment suspended down to what the individuals could actually surrender.
The impersonation and the scare
The FTC’s complaint centres on two things: who the company said it was and what it said about the taxpayer’s debt. According to the FTC, direct mail was designed to look like official IRS or state correspondence, and sales representatives told some consumers their accounts had been “red flagged” or that the IRS was investigating them. The promised fix, per the complaint, was a settlement for “pennies on the dollar”, a claim the FTC says was often made before anyone evaluated the customer’s circumstances.
A suspended judgment, and unfinished business
Selb and Bennett agreed to bans and a $77.7 million judgment that is suspended once they surrender their assets, over $8 million in cash plus additional assets, which the FTC said would fund consumer refunds. The corporate defendants had not answered the lawsuit as of May 2026, when the plaintiffs sought a default judgment against them; this page has not verified how that motion was resolved.
The caveat
The individual defendants settled by stipulated order. The FTC’s public materials describe what the agency and Nevada alleged in the complaint and what the settlement requires; they do not describe a trial verdict, and this page has not verified whether the defendants admitted or denied the allegations. The figures for how many consumers were affected and how much they paid are the FTC’s allegation of “tens of millions of dollars”, a precise total has not been published in the sources read for this page. Nothing here should be read as a finding beyond what the court order itself states.
Sources
- FTC, State of Nevada Sue to Stop Tax Debt Relief Scammers from Falsely Impersonating the Government, Making False Claims and Threats to Consumers. Federal Trade Commission. Accessed 2026-09-28. Supports: The October 2025 complaint, the named defendants, the impersonation and 'pennies on the dollar' allegations, the 'red flagged' claims and the temporary halt to operations.
- FTC, Nevada Will Require Tax-Relief Scammers to Pay Cash and Turn Over Assets Worth Nearly $10 Million to Settle Charges They Misled Consumers about Tax-Relief Services. Federal Trade Commission. Accessed 2026-09-28. Supports: The June 2026 settlement terms: the $77.7 million suspended judgment, the over $8 million surrendered, the bans, the 2022-2025 period and the older-consumer targeting.
- American Tax Service LLC, et al., FTC and Nevada v.. Federal Trade Commission. Accessed 2026-09-28. Supports: The docket number, the filing timeline and the May 2026 motion for default judgment against the corporate defendants.
- Attorney General Ford and FTC Sue Tax Debt Relief Scammers Posing as Government Agencies, Making False Claims and Threatening Consumers. Nevada Attorney General. Accessed 2026-09-28. Supports: The Nevada Attorney General's role and the direct-mail, inbound-telemarketing and online-advertising methods alleged.