Tax Lady Roni Deutch's Tax Resolution Company Sued by the Attorney General

According to a complaint (Part 1 Part 2) filed by the California Attorney General against a well known tax attorney Roni Deutch, she has violated numerous state consumer protection laws, along with the rules of professional conduct governing the conduct of all California attorneys, tax attorneys included. Roni Deutch is well known to viewers of her TV commercials promising to solve tax debt problems through offers in compromise, levy releases, and installment agreements.

The complaint makes many allegations including that:*

• Roni Deutch advised clients that they may suspend their installment payments to the IRS once they have engaged her tax attorneys for tax debt resolution services. Deutch tells clients that once they retain Roni Deutch A P.C., the clients are not legally obligated to continue making installment payments to the IRS. * Roni Deutch’s tax attorneys each regularly carry caseloads as high as 600 to 700 clients at one time, but during especially busy periods can service as many as 1,200 clients at one time.

• Roni Deutch tell clients that their success rate in resolving clients' back tax liability with the IRS is as high as 99%. In fact, her success rate is dramatically lower. In a majority of their clients' cases, Deutch never actually submits a request for tax debt relief. According to Deutch’s own figures, of those clients who retain her tax problem resolution law firm for the offer in compromise service, only 10% successfully receive an offer in compromise from the IRS.

• Roni Deutch solicits clients for her tax debt resolution services in a number of ways, including a television and radio advertising campaign. In these advertisements, Roni Deutch gives clients specific and non-representative examples of clients who have purportedly reduced their tax liability by as much as $150,000 by hiring Roni Deutch A P.C. At least some of these representations are false and misleading.

• The advertisements list a toll-free telephone number for consumers to call to receive a free "tax analysis." When consumers dial the telephone number listed, the "tax analysis" they receive is a sales pitch for Ronni Deutch’s tax problem resolution services from her sales agents, who are hired solely for their ability to sell. Their sales agents are not required to have any background, experience, or familiarity with federal tax law or the IRS.

Of course these are only allegations, and not proven facts, and Roni Deutch has released a statement saying she will fight the suit. If the allegations are true, however, it will probably mean the end of Ronni Deutch’s tax problem resolution service business, and probably her career as a tax attorney as well. The complaint is a cautionary tale for those taxpayers with tax problems. As in all areas of life if the promises sound too good to be true then it’s time to take a closer look.

NonProfits at risk of losing tax exempt status

If you are a tax exempt entity and would like a specialist accounting firm to discuss your situation, please contact us at (813) 283-0642 or email ajhall@hallmarkaccountants.com - We're here to help http://www.HallmarkAccountants.com


What's Happening?

Beginning with the May 17, 2010, filing deadline, the IRS will begin revoking the tax-exempt status of nonprofits required to file an annual return (Form 990-N, 990-EZ, 990, or 990-PF) that have failed to do so for three consecutive years.

Who Should Be Aware of These Changes?

•Nonprofits required to file an annual return that have not done so for three consecutive years. Small organizations with revenues of $25,000 or less are particularly vulnerable, since before 2008, they were not required to submit annual filings to the IRS, and they may not be aware of the requirement.

•Grantmakers and others who need to verify nonprofits' status to know which ones are exempt and which are not.

•Donors who want to ensure that their charitable contributions will be deductible—and that the organizations they are supporting are in compliance with the law.

Why Is the IRS Revoking Tax Exemptions?

The Pension Protection Act of 2006 requires the IRS to revoke the federal tax exemption of any organization required to file an annual return that has failed to do so for three consecutive years. Nonprofits that wish to have their exemptions reinstated will be required to reapply to the IRS for tax-exempt status, a process that can take several months and requires a user fee of $400 or $850.

The IRS will start issuing the revocation notices in 2011.

How Much of an Impact Will the Revocations Have?

GuideStar estimates that 350,000 to 400,000 nonprofits are in danger of losing their exemptions. A large number of these organizations are smaller nonprofits that previously were not required to file an annual return because their gross revenues were $25,000 or less. These nonprofits now must file Form 990-N, which the IRS created in response to the Pension Protection Act.

What Happens if I Give to a Charity That Has Lost Its Exemption?

As long as the nonprofit has not received a revocation notice from the IRS, your gift will still be deductible to the extent allowed by law. Donations made to a charity after it has received a revocation notice will no longer be tax deductible, however.

Other Helpful Points

•Religious organizations are still exempt from filing Form 990. See the list of filing exceptions

•The Form 990-N ePostcard is not for everyone. If your organization is not a 501(c)(3) private foundation and has gross receipts normally in excess of $25,000, you must file a Form 990-EZ or 990. Private foundations of all income levels must file a Form 990-PF. Learn more about filing thresholds

•If your organization is included in a group exemption, your parent organization may be including your financial information in its group return. Check with your parent organization or your accountant to be sure that the annual filings are being made. If your group exemption filings are up to date, you do not have to file separately.

•If your organization's exemption is revoked, the only way to reinstate it will be to reapply for tax exemption at a fee of as much as $850.

The COBRA credit: What employers must know

A provision in the American Recovery and Reinvestment Act of 2009 affects the health insurance coverage of your recently terminated employees — and your payroll tax liability.


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The overview. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) contains health insurance rules applicable to your business when you employ 20 or more workers. Forty states have similar "mini-COBRA" laws that apply when your business employs less than 20 workers.

Under COBRA, you are generally required to provide eligible, recently terminated employees who were enrolled in your active health insurance plan the opportunity to continue coverage for up to 18 months. Your former employees pay the full premium.


What's changed. The new law, which became effective February 17, 2009, temporarily reduces the share of health insurance premiums your eligible former employees have to pay to 35%. Your business pays the remaining 65%. You then claim a credit for your share on your federal payroll tax return (Form 941, 943, or 944).

You can use the credit to reduce payroll tax deposits, or you can claim the entire amount at the end of each quarter.

The change applies to employees terminated through December 31, 2009, and is available for up to nine months of coverage.


What you need to do. Employees must be notified of the reduced premiums, and you'll need to keep copies of the notifications.

In addition, maintain records of payments you receive from employees who choose to participate, as well as proof of your remittance to your business's health insurance provider.


The only way to claim the COBRA credit is on payroll tax returns for applicable periods. If you overlooked it on your first quarter payroll return, please call. We can help you file an amended return and assist you with payroll return preparation in future quarters.