Tax Lady Roni Deutch Sued For $34 Million By California AG

Last week, when we asked for nominations for really horrible TV ads, self-described “Tax Lady” Roni Deutch’s name was mentioned more than a couple times. Adding insult to injury, Roni is now being sued for over $34 million by the California Attorney General over allegations that her heavily advertised tax relief service doesn’t actually live up to its promises.

According to AG Jerry Brown, Deutch’s TV ads claim a 99% success rate in reducing the amount of money her clients pay to the IRS. The suit says that number is a little lower, closer to 10%.

Says Brown:

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.

The suit says that Deutch’s Sacramento-based firm earns at least $25 million each year and spends $3 million on advertising.

In addition to unspecified civil penalties, the suit seeks $33.9 million in restitution for Deutch clients who have filed complaints alleging they were defrauded when the firm collected a retainer but failed to win tax settlements.

One ad singled out in the suit involves Deutch’s claim that her firm helped three clients save a total of $86,000. But according to Brown, those clients featured in the ad still owe the IRS taxes, penalties and interest.

If this sounds a bit familiar to you, it’s possible you’re thinking of the 2006 lawsuit filed against Deutch by the NYC Dept. of Consumer Affairs. The settlement in that case — $300,000 in fines and restitution — was pocket change compared to the millions the California AG hopes to get.

When asked for comment on the lawsuit, Consumerist’s own Tax Cat said, “Meow,” and then went back to chasing a centipede.

‘Tax lady’ Roni Deutch faces California fraud lawsuit [USA Today]

Comments

Edit Your Comment

  1. Loias supports harsher punishments against corporations says:

    I don’t see how someone can negotiate to lower your tax liability. The IRS is almost always willing to set you on a payment plan so you’re not just earning $750/month net after a Tax Levy (which is about the current level). But I’ve never heard of them forgiving your tax debt.

    • c!tizen says:

      That’s exactly what I was thinking. How exactly does one get the IRS, an entity that only exists to take money from people, to forgive a tax debt?

      I wonder if she’ll represent herself? I’m willing to bet it’s been a long time, if ever, since she’s been up against someone like an AG.

      • Loias supports harsher punishments against corporations says:

        I doubt she’s ever been qualified for such a feat. Lawyers are pretty field-specific (the good ones anyway) and it sounds like she’s rarely gone to court. I imagine most of her work has been filing the right paperwork and knowing how to maneuver the system.

        If there’s one thing shady lawyers know how to do, it’s maneuver the system.

        • dpeters11 says:

          And even an excellent trial lawyer would never represent themselves. They hire another lawyer to represent them.

      • A Pimp Named DaveR says:

        How? Show them they will never, ever be able to collect some or all of the debt you owe.

        Say you somehow owe $250,000 in back taxes on your small business, which nets about $10k a year in profit and is worth about $200k. The IRS can come in, levy on your business, take everything you own that they legally can levy, and maybe see $100k from the deal, after months of procedural collection effort. Or, they can lop the bill to $100k right off the bat and enter into a payment plan with you for that amount. Most of the time they will do the latter, as they are working with finite resources and can’t levy on every single outstanding tax liability in the USA. Net-net, they probably do no worse collection-wise from working with you.

    • Jesse says:

      What these talking heads on TV talk about when reducing tax liabilities is an Offer in Compromise. If a taxpayer cannot legitimately pay a tax debt, the IRS sometimes is willing to accept an OIC in order to collect on some of the tax owed.

      http://www.irs.gov/businesses/small/article/0,,id=104593,00.html

  2. craptastico says:

    am i the only one that thinks they get a lot of mileage out of their $3million/year advertising budget? it seems like these commericals are always on

    • DanRydell says:

      Seriously. I hate that bitch.

      • fatediesel says:

        I’m in Iowa and have never seen those ads, so maybe she focuses on certain areas. That’s not to say I haven’t seen plenty of ads for companies making the same promises though, especially when I watch TV over my lunch hour, when it seems half the ads are for tax or credit card relief companies.

    • CalicoGal says:

      Well they certainly saved on production costs since they apparently filmed the commerical with an iPhone.

    • huadpe says:

      $3 million is a pretty big ad budget, particularly if she’s focusing on a semi-local market.

      As a point of reference, a normal car dealership has about a $600,000/yr ad budget, and most people will see their commercials pretty often if they’re in the area. For $3,000,000 you could probably do heavy saturation of TV ads for the SF Bay, Sacramento, Reno, and everything in between.

      For national advertising it’s not huge, but concentrated locally it is a big number.

    • Enduro says:

      I was actually shocked that they spent so much on those ads. I would have never let those out of the can. Also, I would have overdubbed the way she says “Deutch”. It’s obnoxious.

  3. RxDude says:

    NEVER, EVER, EVER hire a lawyer that advertises on TV.

    • dolemite says:

      My wife is a paralegal with a large local firm that advertises *heavily* on local tv…I believe they are one of the more successful firms in the area.

      • Loias supports harsher punishments against corporations says:

        Advertized legal agencies are generally well-off because they are the ones people see more often. They also tend to charge more, both because they spend a lot on advertising and because they realize they are well-known and can charge more – not to mention that people who call TV-laywers clearly haven’t done any leg-work and don’t know what competitive legal rates are.

        Sorry, but I think RxDude is right – TV lawyers are for the ignorant, not the consumer who has done his research.

        • digital0verdose says:

          The same could be said for any commercial seen on TV. That is what they are there for, convenient research.

          • c!tizen says:

            LOL, did you just compare TV commercials to research?

            • digital0verdose says:

              No, it wasn’t a comparison, it was a direct connection. Any time vested in learning about something is research. Regardless if the time spent is 30 seconds or 30 days.

              Please note that I did not say you would walk away from a commercial being the all knowing of what you just saw.

              • c!tizen says:

                But the whole point of research is to look into the claims beyond the surface, find the facts. The whole point of this article is that advertisements are full of misinformation, most times intentionally so. By definition an advertisement is the opposite of research, it’s a 30 second spot full of baseless claims to pull you in to a product or service.

                I’m not disagreeing that commercials can start the research process, but an Ad is a far stretch from actual research, unless of course it’s ads that your researching.

                • c!tizen says:

                  *you’re*

                  -edit button please, please, please!

                • digital0verdose says:

                  “By definition ads are not research.” That is simply not true. It is not up to you and me to decide how long a person’s research window should be. If at the end of the day a potential consumer feels and advertisement has given them enough information to make a judgement, then in their mind their research is done.

                  • Loias supports harsher punishments against corporations says:

                    I’m pretty sure that an advertisement is not research. If it was, it would be called a researchtisement.

                    TV ads are purposely lacking in actual unbiased facts. Research involves seeking out knowledge and facts, not being told facts at random.

                    It doesn’t pass the smell test because A) You did not initiate the information (TV ad), B) TV ads are biased, and C) the purpose of the ad is to persuade you, not to teach you anything. It’s an ad, and thus the purpose it not to get information.

                  • c!tizen says:

                    I’m not saying anything about the time it takes to research something, though any “research” done in 30 seconds most people wouldn’t trust for shit. I’m saying a commercial is not research. In no way, shape or form is it research.

                    http://www.merriam-webster.com/netdict/research

                    http://www.merriam-webster.com/dictionary/advertising

                    Advertising is the act of making a product or service known. Research is a “studious inquiry or examination” into a subject. Research = fact finding. Commercial = for profit. It’s not my opinion, it’s their definition.

                    • digital0verdose says:

                      What you are failing to understand is that the definition of research uses subjective wording, not objective. If a person feels they have learned all they needed to know by watching a commercial, then that ties into their research for that product.

                      I am not saying it is good research or thorough but it is still research because information is being gained.

                    • c!tizen says:

                      but the information gained is not fact, it’s always bias. Research is a FACT FINDING endeavor.

                      That’s like me saying dealership A has the lowest prices in town because their commercial said so. If you did RESEARCH, then you’d know that in fact dealership B has the lowest price in town because you did comparisons, analysis, took into account TT&L, seller’s commission, purchase options, incentives, and APR; then looked at them side by side.

                      I get what you’re trying to do. You’re saying technically any information that can be gleaned is considered research, but it’s not. Research isn’t the presentation of bits of bias information presented to gain profit from a service or product, that’s called a commercial or a plug. Research is the analysis of all possible unbiased information with the goal of proving a theory or finding truth.

                    • digital0verdose says:

                      You are defining research through a very narrow lens, which would be fine if we were talking about a white paper or a scientific study, but we aren’t. We are talking about consumerism where research and what it means is complete subjective to the person who is collecting the info.

                      Again, in this sense, based on the user, the definition retains it’s relative meaning because neither you, myself or a scientific body are able to dictate to the consumer what proper research is. It is completely up to the consumer.

                      It is unfortunate you are not getting this as it is pretty elementary.

    • ames says:

      Bad advice, dude. The old “advertising = automatically BAD” mindset is dumb.

      Instead, never EVER hire a law firm without doing the research on it first. Plenty of upstanding and ethical firms advertise on TV.

      • RxDude says:

        I will further expand the services I generally would not patronize if they advertize on TV

        Doctor

        Church

        College

        Martial Arts school

    • Tim says:

      Hey. Johnny Cochran got a not guilty verdict for O.J. Simpson, and he still advertises on TV even after he’s dead.

      O.J. Simpson!

    • anker says:

      Jay Trucks and Associates got me 36,000 for my workmens comp knee injury.
      I really was their target audience. I had had the surgery and was laid up on my couch for quite awhile watching mindless t.v. all day and night.
      I only had to meet with my lawyer twice in the two years it took to settle the case. One of those times was to sign my settlement papers. He only charged me 10% since it was easy for both of us.

    • craptastico says:

      this lady isn’t a lawyer though. if you look at the fine print they really don’t have any qualifications to do anything

  4. sois says:

    What a Deutchbag!

  5. digital0verdose says:

    Wait, wait, wait… A commercial with some talking, head promising rainbow level results dealing with money, turned out to be bull shit? STOP THE PRESSES!!!

    Seriously though, I am not generally for the death penalty because DNA testing can get botched and in general the legal system makes mistakes, but I wouldn’t oppose it for people like this since their crimes are so upfront and get air time.

  6. HeyThereKiller says:

    She spelled ‘Douche’ wrong…

  7. jshier says:

    Nice frame capture. Summarizes her nicely.

  8. HogwartsProfessor says:

    When asked for comment on the lawsuit, Consumerist’s own Tax Cat said, “Meow,” and then went back to chasing a centipede.

    LOL! Thanks, Chris, I needed that laugh today.

  9. jessjj347 says:

    I bet her firm prays on people who want the Earned Income Tax Credit just lots of others companies you have to pay to do your taxes…

  10. SkokieGuy says:

    Someone please tell me why she yells her last name like a Jersey truck driver in her commercials?

  11. BuyerOfGoods3 says:

    Sigh. Another sad story for all of us out there who are Not idiots, who Realize False Advertising, who steer clear — Instead, those idiots who fell for the scam will now be your bosses because they’re millionaires.

    Disgusting.

    • Shadowman615 says:

      LOL, nobody becomes a millionaire from class-action or AG lawsuits. These people will be lucky to get even half of their money back.

  12. Dallas_shopper says:

    I hope she goes out of business so I don’t have to see her annoying ass commercials on TV. She advertises heavily in the DFW area.

  13. dr_drift says:

    Poor Roni. Oh well, I think the Taxmasters guy is totally hotter in his commercials.

  14. zaku2s274 says:

    99% success rate of the cases she takes, which is probably very few to none at all.

  15. MaxH42 thinks RecordStoreToughGuy got a raw deal says:

    OK, this was a good story, but marred by an error.

    [/pedant]

    “One ad singled out in the suit involves Deutch’s claim that her firm helped three clients save a total of $86,000. But according to Brown, those clients featured in the ad still owe the IRS taxes, penalties and interest.”

    The two are not mutually exclusive. Theoretically, those three clients may have owed a total of $386,000, but after providing some sort of proof over when something was filed, had their tax liability reduced to $300K. Yes, I’m pulling that out of my Zuckerberg, but it’s possible.

    The last sentence in this part of the original article is crucial to explaining why it was fraudulent:

    “For instance, it says one ad portrays three clients she purportedly helped save a collective $86,000, yet all three still owe their taxes plus interest and penalties. Deutch merely won the three clients a delay from the IRS’ collection efforts, according to the document.”

    {/pedant]

    • hotdogsunrise says:

      Good point. I had the same thought myself. Glad you added that final sentence as it makes much more sense now.

  16. smo0 says:

    I’ve seen those ads… but I’ve seen others… I wonder which ones are actually legit.

  17. Abradax says:

    10% of the time, it works every time.

  18. buckeyegoose says:

    Um, guys she’s not just a lawyer she also run’s HR Block-esque operation

    http://www.youtube.com/watch?v=JBkeYAW6Nnk

    • Hoss says:

      She’s a lawyer. Western State University. And her website says Law Firm

    • Keavy_Rain says:

      I drive by her offices every time I go to visit my parents and the building has a huge banner with a phone number to call about starting your own RDTC franchise.

      I imagine she’s looking to become the Colonel Sanders of taxes.

  19. Verucalise (Est.February2008) says:

    Maybe she should hire Finkelstein & Partners, after all- this all must be so traumatizing to her.

    • hotdogsunrise says:

      If she gets in a car accident because of this stress, she can call William Mattar. Just keep hitting the number “4” on your phone – you’ll get through to him eventually.

  20. Sunflower1970 says:

    Ahhh. Yes. Now our local radio station will stop playing her ads. They always bugged the hell out of me. Her voice made me think of some uneducated woman that if you accused her of lying she’d punch her lights out.

    • Shadowman615 says:

      She’d punch her own lights out?

      • Clumber says:

        Now THAT I would pay for(2). In fact I am (1) – right this very moment – trying to shove a $20 through my monitor and into your wallet just for the image in my head of the dirtbag punching her own lights out!

        (1) a lie
        (2) not a lie

  21. peebozi says:

    “Unlimited Data Plan”

    “Free Cell Phone”

    “Free Overdraft Protection”

    I think this is clearly a result of her bribes not being large enough or timely enough.

  22. Aedilis says:

    Everytime I see one of these ads, all I really hear is this:

    “Don’t want to be responsible and contribute to the government? NO PROBLEM!”

    “I went with [tax reduction scam company]’s service and I had $600,000 owed to the IRS. I only had to pay $1,000!”

    So each and every one of those testimonial people just skipped out on paying their fair share to the government. I’m not one for approving what the government does with the money sometimes, but I expect people to pay what is owed to the government just like I do and everyone else does.

  23. Clyde Barrow says:

    I always hated the way that she pronounced her last name with a hard “D”. Drove me nuts.

  24. zekebullseye says:

    She’d “better call Saul!”

  25. FredTheCat says:

    I hired her 7 or 8 years ago to work out an OIC and got the runaround, filling out form after form of the same information only to be told I hadn’t provided the information, endless delays on their part. Things turned really ugly and I ended up filing complaints with both the California Attorney General and the BBB. The AG’s office took her to task over it and eventually compelled her to refund most of my deposit, pointing out things like billing senior attorney rates for work done by low-level staffers, etc. The next person I hired took care of the whole issue quickly, professionally, and for a fraction of what Deutch took as a deposit. This news made my day! :)

  26. Liam Kinkaid says:

    Hey, she should call 1-800-ASK-GARY to get a lawyer recommended to her.

  27. savdavid says:

    Devoted 15 years to making money and ripping off people. 15 years of giving out tax help?…..not so well.

  28. Shadowman615 says:

    Large up front payments? But I thought she did it for twenty dollars. TWENTY DOLLARS!

    Actually when she says it, more like “chwenny dollars.”

  29. Taxproblem says:

    IRS Tax Debt

    There are many taxpayers who owe back taxes and they just want to get over with IRS tax debt.

    We are a quality CPA firm specializing in IRS Tax Problem help. Our firm is over 30 years old and we maintain an excellent reputation.

    We can help. Visit Tax Problem

  30. Clumber says:

    I refuse to comment on a tax story WITH reference to TaxCat that does not provide required LOLworthy picture of said TaxCat.

    And that’s Ronnie DEUTCH! emphasis apparently to discourage us from calling her a Douche. Which it sounds like she is.