Owing back taxes to the IRS and looking for debt relief has driven many Texans to desperation. With a personal financial crisis like tax delinquency, it is easy to want to shift the problem to someone else, even if it means paying a debt relief firm to handle it.
Any debt relief firm that promises to eliminate or solve back tax liabilities with the Internal Revenue Service for “pennies on the dollar” may be asking for a lot, but delivering very little in the way of consumer help. The following recent example may help illustrate this.
Roni Deutch, a lawyer who once billed herself as the “Tax Lady,” is being sued by the state of California for $34 million. According to the state attorney general’s office, Deutch nationally advertised that her firm could solve tax delinquency problems for consumers. Prosecutors say Deutch took advance payments, but did little or nothing to help clients.
Although Deutch denies that she has done anything wrong, she has turned over her license to practice law and says she’s broke. Prosecutors say she gladly took prepaid fees up to $4,700 and did no more than file an Attorney and Declaration of Representative form with the IRS on behalf of her clients.
Deutch’s firm would screen clients first through a sales agent. Prosecutors say the sales agents promised clients that the firm would provide them with debt settlements that would significantly less than the amount they owed. They also told clients that they would owe no IRS interest or penalties. A second screening with a so-called legal verifier made sure potential clients were not guaranteed any specific financial returns.
The attorney general’s office said frustrated clients of Deutch complained to the IRS. The majority found that no requests had ever been made in their names by Deutch for federal tax debt resolution.
As this example shows, it is important to be cautious when seeking help with debt relief. If you are facing problems that involve the IRS, seeking experienced legal advice may be beneficial.
Source: Richmond Times-Dispatch, “Singletary: The tax of desperation,” Michelle Singletary, 7 June 2011