Legal showdown between Roni Deutch, Jerry Brown heats up
by AccountingWEB on
Heading into the next tax season, California Attorney General and Governor-elect Jerry Brown is still dogging “Tax Lady” Roni Deutch with fraud charges.
Deutch appears in TV commercials stating she will “protect your paycheck” and “stop IRS collections.”
She also has recently come out with her latest book, Surviving the Coming Tax Disaster, and the third edition of The Tax Lady’s Guide to Beating the IRS is scheduled to hit stores in January. In spite of the negative publicity brought on by the charges, her publishers say her books are selling well.
Brown claims that Deutch and her firm steal from clients by promising results, then billing them for thousands of dollars while doing little or nothing to secure tax relief. He is seeking an injunction to stop what he calls “fraudulent and deceptive practices.” Specifically he would like to force her to return $34 million in fees collected from clients.
Brown also wants her firm to stop taking new fees until the state can determine whether her clients have a chance of resolving their tax issues. Deutch’s lawyers said such a ruling would be like telling a law firm they can represent clients but can’t be paid for their work until the case goes to court.
State attorneys deny the ruling would cripple Deutch’s business, adding that Deutch and her lawyers have provided no evidence to support that claim. When asked whether the lawsuit has already hurt the business, Deutch’s attorney, Tad Devlin, had no comment.
The state intends to introduce written testimony from clients who say Deutch and her firm made false and misleading promises, according to The Sacramento Bee.
Daniel Snyder, a resident of Orange County, California, testified that when he called for information, he was told the attorneys at Deutch’s firm were all former employees of the IRS and that they could reduce his $32,000 tax liabilities to "pennies on the dollar.” Two years later, when his paycheck was garnished for the unpaid taxes, he called the IRS. Snyder said he was told at that time that the only action Deutch’s firm had taken on his behalf was to file a power of attorney. He complained to Deutch’s firm, but was refused a refund of fees amounting to $2,200.
In her firm’s defense, attorneys told reporters the state’s evidence was “stale.” Deutch said that she is certain she will be vindicated. “My law firm has been representing taxpayers before the IRS for 20 years. We have saved thousands of people tens of millions of dollars,” Deutch said on her Web site.
Attorneys for Deutch presented written testimony from 78 “satisfied clients, all of whom recently utilized the firm’s services,” including Orland Crumpton of Chapin, South Carolina, who said the firm reduced a debt of $11,500 to $474.62.
Besides the state lawsuit, Deutch is being sued by seven clients.