California sues ‘Tax Lady’ for $34 million

The “Tax Lady,” Sacramento-area tax attorney Roni Lynn Deutch, was sued for $34 million by state officials Monday on charges that her firm swindled thousands of clients.

The lawsuit by state Atty. Gen. Jerry Brown said Deutch’s $25 million-a-year empire is essentially a fraud, with clients paying thousands in fees but getting little or no legal assistance in return.

Known for her relentless TV commercials, Deutch promises to help people who are in trouble with the Internal Revenue Service. Brown’s suit said that only 10% of her clients ever get their tax debts resolved. Most quit or are terminated by Deutch’s firm and are denied refunds after Deutch’s staff bills them for work that wasn’t performed, the lawsuit said.

The suit said her TV ads are filled with misleading statements. In one spot, three clients say they had thousands of dollars of IRS debt wiped off the books. Actually, their debts were temporarily placed on hold, while penalties and interest continued to pile up, the suit said.

Deutch couldn’t be immediately reached for comment.

“Tax Lady Roni Deutch is engaged in a heartless scheme that swindled people with tax problems,” Brown said in a news release.

He is seeking a court order halting her advertising. A hearing is scheduled for Wednesday in Sacramento Superior Court.

Deutch has opened dozens of franchises across the country, known as the Roni Deutch Tax Center. In March she set up a booth outside Arco Arena in Sacramento during a Sacramento Kings basketball game and offered to prepare federal tax returns for free for the first 200 customers.

Kasler writes for the Sacramento Bee/McClatchy.