Tax Lawyer's Blog

If you’re an insomniac you may recognize Roni Deutch from her ubiquitous late night infomercials promising taxpayers pennies on the dollar settlements with the IRS:

Joe Kristan writes about yet another lawsuit against Deutch:

California’s Aspiring GovernorAttorney General Jerry Brown has sued Attorney Roni Deutch, who blogs as the “Tax Lady,” for “swindling” taxpayers who hire her to get taxes forgiven. From the AG’s press release: 

“Tax Lady Roni Deutch is engaged in a heartless scheme that swindled people with tax problems,” Brown said. “She promises to significantly reduce their IRS tax debts, but instead preys on their vulnerability, taking large up-front payments but providing little or no help in lowering their tax bills.”

Deutch manufactures credibility by boasting that her tax resolution law firm, which has annual revenues of at least $25 million, is the largest of its kind in the nation. She spends $3 million a year on advertising, much of it on late-night cable TV, and frequently offers tax advice on NBC’s Today Show, CNN, and CNBC. 

Desperate debtors turn to Deutch based on her misleading ads that feature fictional testimonials claiming she secured large reductions in the featured clients’ federal tax debts. 

Her blog has no mention of the suit yet. 

TaxGrrrl (“no relation”) notes that Ms. Deutch paid $300,000 to New York to settle similar claims. The California lawsuit seeks $34 million. 

While I have no insight on whether there is anything to the lawsuit, taxpayers shouldn’t assume that TV “tax settlement” outfits really can perform the magic they claim. The limited work I’ve seen from TV tax settlement outfits was very unimpressive — though I’ve never seen any work from the Deutch firm. The IRS usually will forgive debts only if you are really a “turnip” with no ability to ever pay the debt off. If you are that upside-down, though, you probably need more than just tax relief; you likely should be working with bankruptcy counsel. 

Joe is right. Offers in compromise (IRS settlements) are extremely difficult to get.

People like Ms. Deutch who advertise that they can get taxpayers “pennies on the dollar” deals without first obtaining and analyzing their detailed financial information, their bank statements and their prior tax returns are blowing smoke.

Over the last 20 years I have had hundreds of taxpayers hire me after they hired assembly-line tax outfits like Deutch, J.K. Harris and Tax Masters. 

They all tell the same story:

I met [talked on the phone] with someone locally and he told me that [insert tax outfit name] would get me an IRS settlement for just a fraction of what I owe. I paid him $5,000 and signed a power of attorney form. I have not heard from anyone since then. I have called them several times and each time I get a different person who knows nothing about my case.   

These scam outfits perpetrate the classic bait and switch. They hire salesmen to say whatever it is they need to say to get a taxpayer to part with his money. Once they have the taxpayer’s money, their enthusiasm about working on the case declines precipitously usually to the point of inaction. And there is little the taxpayer can do about it because the scammer’s operations are located out of state.

Attorneys like Roni Deutch conduct extensive advertising campaigns in states other than the one in which they are certified and regulated. This allows them to avoid the advertising rules that other lawyers practicing in the state are required to follow.

For example, because the Florida bar association does not have jurisdiction to discipline Ms. Deutch according to its own stringent advertising rules, Ms. Deutch is free to make promises and guarantees that if made by a Florida attorney would result in disbarment.

Bookmark & Share: