Score One for Those Swindled by the "Tax Lady" Roni Deutch

Score one for all those who found empty promises to go along with their empty wallets after they hired the "Tax Lady" Roni Deutch to represent them before the IRS.

Deutch has closed her firm and turned in her license to practice law after a California judge froze her assets. This is just the beginning in a long battle Deutch faces against the State Bar, the Attorney General, the IRS and a long list of ticked-off clients.

The Law Offices of Roni Deutch advertised heavily on late night television paid programming and on radio spots. According to Deutch's web site, her company lawyers have been pursuing "the best possible IRS tax debt solution for each client, saving them thousands of dollars along the way."

However, the California Attorney General Jerry Brown firmly disagreed, charging Deutch last year with swindling thousands of her clients out of millions of dollars. A $34 million lawsuit was filed against her, which is still pending.

In May, Deutch shuttered her law offices and turned in her legal license. At the press conference Deutch held at her California office, she directed strong words at the State Bar.

"I am letting you know right now that I am turning in my state bar license after 20 years," she said. "So I say this to you, State Bar of California, 'ËœAre you going to come to my building and help my 4,000 active clients? Are you going to do that, State Bar of California? Will you now come and pick up my 45,000 debt files? Do you really care about my clients, State Bar of California?"

In fact, the State does care very much about her clients.

"Tax Lady Roni Deutch is engaged in a heartless scheme that swindled people with tax problems," Brown said at the time the lawsuit was filed.

For instance, the lawsuit 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.

In fact, the lawsuit shows that only approximately 10 percent of Deutch's clients ever get their tax debt resolved, despite Deutch's boast of a "99 percent success rate." The majority of Deutch's clients fire the firm after they are heavily billed for services that either were not performed, or for actions that they could have easily taken themselves.

Deutch's firm, which owns a chain of 70 franchised Roni Deutch tax centers in 23 states, commonly would send the IRS a form letter requesting a 10-week hold so that the firm can pursue options for their clients, such as an Offer in Compromise.

Once a taxpayer's account has become delinquent to the point that it has been turned over to IRS collections, a 10-week hold request is not only meaningless, since cases are not delayed to that extreme, but also only costs taxpayer more penalties and interest as their case sits un-worked for months on end.

On the heels of the shutdown, the IRS also filed a Notice of Federal Tax Lien against Roni herself, to the tune of $183,000. The fact that the "Tax Lady" amassed such enormous tax debt says little about the competence of her resolution firm.

At her press conference, Deutch belly-ached that she was broke, citing $10 million in business debt and another $5 million she owes personally to creditors.

She has been accused of evidence shredding by destroying million of documents that could have been used to prosecute her in the lawsuit.

According to Accounting Today and the Sacramento Bee, she has also been accused by the Attorney General of violating a court order by using a call center to route calls from her old offices to her brother's tax resolution business and to other tax resolution businesses owned by former employees.

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