S.C. Declines to Allow ‘Tax Lady’ to Resign From State Bar

Thursday, January 12, 2012

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S.C. Declines to Allow ‘Tax Lady’ to Resign From State Bar

By a MetNews Staff Writer

The California Supreme Court yesterday declined to accept the resignation of Sacramento-area attorney Roni Deutch from the State Bar.

Deutch, who has been on inactive status since tendering her resignation last May, used to run national television and radio ads billing herself as the “Tax Lady.” The rejection of her tendered resignation leaves her facing disbarment for multiple counts of unethical conduct.

The then-chief trial counsel for the State Bar, James Towery, revealed on May 12 that Deutch had been under investigation “for some time.” While the State Bar is typically prohibited from acknowledging pending investigations, Towery said Deutch waived confidentiality by announcing at a press conference in Sacramento earlier that day that she was bankrupt and planned to surrender her license to practice law.

In its formal notice of disciplinary charges, filed June 3, the Office of Chief Trial Counsel charged Deutch with failing to obey court orders. Then-Attorney General Jerry Brown sued Deutch in August 2010, accusing her of swindling money from thousands of individuals seeking to resolve IRS collection problems.

Deutch was held in contempt of court last April for defying an order requiring preservation of documents and violating a preliminary injunction compelling her to issue some $435,000 in refunds to her clients.

In addition to disobeying court orders, the OCTC charges, Deutch engaged in moral turpitude by shredding millions of pages of documents in an effort to frustrate the attorney general’s ability to obtain discovery and by withdrawing money that should have been used for client restitution and giving it to friends or relatives.

Deutch is also accused of:

•Using sales agents to mislead taxpayers into believing that their chances of obtaining favorable resolutions of their tax problems if they hired her were greater than they actually were;

•Splitting fees with those sales agents, who were not lawyers;

•Running false and misleading broadcast ads, in which clients offered testimonials claiming that they avoided thousands of dollars in taxes, when in fact Deutch had only obtained temporary delays in collection, and in most instances had done no work on the matters herself;

•Communicated through the sales agents that she had been 95 or 98 percent successful in obtaining IRS acceptance of “offers in compromise” for clients, which was untrue;

•Performed incompetently by seeking IRS relief on behalf of clients who were not eligible for the forms of relief sought, or by delaying action for so long it injured the clients’ ability to obtain relief; and

•Failing to account for client funds and misrepresenting the amount of work she had done on client matters.

In other news, the high court ordered the disbarment of former Arcadia lawyer Alexander Fu-Ping Sun, who was convicted of insurance fraud. Sun had tendered his resignation following his 2009 conviction.