L.A. Tax Relief Company Sued

A Los Angeles company whose nationwide advertising offered tax delinquents a chance to settle with the Internal Revenue Service for “pennies on the dollar” collected hefty fees but often couldn’t deliver on its promises, according to two lawsuits.

New York City’s Department of Consumer Affairs filed a lawsuit Monday accusing American Tax Relief of bombarding households with junk mail that exaggerated what it could do for clients with big tax debts.

Separately, a Brooklyn woman filed a lawsuit Thursday that claimed she paid thousands of dollars to the firm and wound up with the same debts with which she started.

“They never helped me at all,” said Willie Mae Brown, 53, a retiree who says she paid the company $5,000 to help resolve what was then a $50,000 tax debt.

Brown said she later learned she didn’t qualify for the IRS settlement program the company was pitching to its clients. She eventually had to pay the IRS about $80,000.

An attorney for American Tax Relief, Charles L. Kreindler, defended the company’s advertising. He said the firm had saved “millions of dollars for thousands of taxpayers since 1998” but never claimed that it could save money for everyone.

Kreindler blamed complaints about the firm’s performance on the frustrations of desperate delinquents. “In any business like this, you are naturally going to get disgruntled clients,” he said.