‘Tax lady’ overstates wins, suit says

Associated Press / August 24, 2010

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SACRAMENTO, Calif. — California’s attorney general sued “tax lady’’ Roni Deutch for more than $34 million yesterday, alleging that her law firm regularly violates state law by making false promises it will help people resolve disputes with the Internal Revenue Service.

Attorney General Jerry Brown contends Deutch overstates her TV claims of winning tax battles. She advertises a success rate of up to 99 percent, yet successfully reduces the amount of money her clients owe in taxes in just 10 percent of cases, the lawsuit says.

She “preys on their vulnerability, taking large up-front payments but providing little or no help in lowering their tax bills,’’ said Brown, the Democratic nominee for governor.

Deutch’s law firm referred calls to an attorney who did not immediately respond to a phone message from the Associated Press.

Brown’s lawsuit says Deutch’s firm takes in at least $25 million annually and spends $3 million on advertising.

It seeks a preliminary injunction to block what it alleges are unfair business practices and false advertising.

The case seeks unspecified civil penalties on top of $33.9 million in restitution for hundreds of clients.

Deutch has faced similar allegations before. In 2006, she settled a lawsuit filed by New York City’s Department of Consumer Affairs that alleged she misled consumers with her advertising. She agreed to pay $300,000, including $100,000 in fines and $200,000 in restitution.