I've been on Taz for about 2 weeks (.05% gel) and been breaking out also. I've been getting ALOT of whiteheads but I guess it's just normal. I feel that you need to go through the worst before it gets better. I've also been flaking big time. I'm planning to stick it out for the next couple of months to see how it goes. Don't worry you're not alone. Good luck.

Am:
Cetaphil (wait 5 minutes)
Cleocin T(wait 2 minutes)
Sunblock

Pm:
Cetaphil (wait 30 minutes)
Tazorac (wait 30 minutes, wash off w/ cetaphil, use every other night)
OR
Finacea (keep on all night, use every other night)
clean and clear oil-free moisturizer
Yasmin BC

I feel that my face is getting lesser and lesser cysts though and this has been only two weeks.