California Attorney General Edmund Brown is suing TV's Tax Lady Roni Deutch for $34 million, claiming she duped thousands of consumers who sought her tax advice.
"Tax Lady Roni Deutch is engaged in a heartless scheme that swindled people with tax problems," Brown said in a statement. "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 is a licensed attorney who runs a tax resolution law firm in California. Her claims to fame are her frequent appearances on late-night cable TV, NBC's Today Show, CNN and CNBC.
A spokeswoman for Deutch was not immediately available to comment on the lawsuit.
In the lawsuit, Brown accuses Deutch of airing misleading ads that feature fictional testimonials in which consumers claimed she helped them significantly lower their tax bills. One of the ads featured three clients who, according to Brown, still owe the IRS their entire bill, plus interest and penalties.
The lawsuit also accuses Deutch and her firm of using high-pressure sales tactics and taking advantage of seniors as well as disabled consumers, who can't afford to pay their tax debt. To convince consumers, Deutch's sale agents would claim that the firm had a success rate of 99%, but the lawsuit says that rate is actually 10%.
Clients are also promised that they qualify for the IRS's tax debt resolution program, which Brown says is misleading because only the IRS can make that decision.
Sales agents allegedly make a number of other false promises during their contact with the client, such as that retaining the firm will stop or prevent the IRS from collecting on back taxes and stop or prevent the IRS from garnishing wages.
"Defendants specifically misled many clients into believing that once they give Defendants power of attorney over their tax debt, the IRS can no longer collect on their tax debt," the lawsuit reads. "Later ... these clients are subject to wage garnishments, bank levies and/or federal taxes."
The attorney general's office says hundreds of Deutch's clients have filed complaints. In addition to not lowering their debts, consumers says she also refused to refund fees of as much as $4,700 that her firm charged.
Small Cap Investing
Learn now to invest in small companies the right way.View Course »