“Pennies on the dollar” may be a great pitch on cable television, but it’s not a surefire business plan. Desperate taxpayers who have paid money up front to JK Harris to resolve their tax debts at a discount are joining the IRS as potential “pennies on the dollar” creditors now that this leader in the tax settlement industry is filing for bankruptcy protection.
This is the second major blow this year to cable TV ad revenues. Earlier this year “Tax Lady” Roni Deutch gave up her law license in the face of charges that she took fees up front to resolve tax debts and failed to follow through.
Tax nerds see the late night ads when we get home and wonder how these outfits manage to get such great deals out of the IRS when getting the Service to actually forgive tax debts is like pulling teeth from a grumpy rhino for the rest of us.
TaxMasters now stands as the biggest remaining player in the TV tax settlement business, but they have their own problems. They were de-listed last month from the OTC Bulletin Board to the pink sheets for failing to file their 10-Q due August 15. The last reported trade for Taxs.pk is at 13 cents. They have also been sued by the Minnesota Attorney General for allegedly deceptive practices. ABC News reported on the suit:
The Minnesota attorney general says many of the company’s employees are skilled tele-marketers who have little knowledge of the complicated tax issues faced by people who have fallen behind in filing their returns or making tax payments. “When you call, you think you’re talking to a tax professional,” said Swanson. “You’re really talking to just a salesperson who’s trying to get you to sign up.”
So maybe the secret is that the late night settlement outfits are staffed by telemarketers who just happen to be awesome at selling pennies-on-the-dollar deals to the IRS. If that’s true, though, they seem to be having a lot of trouble turning what would truly be a remarkable and valuable skill into profits.
There’s nothing quite as humiliating as a public fall from grace, especially when you’ve spent your entire net worth on infomercials and bad stripey highlights. For the tax crusader formerly known as The Tax Lady, going quietly into that dark night just wasn’t going to do.
As you can clearly see by her Twitter account, which we have screenshotted for eternal preservation just in case the State of California requires her to take it down, Roni Deutch made a last ditch effort on May 13th to spread word of her press conference last week to just about anyone who would listen. We don’t qualify an “@” as actually listening, but maybe it made her feel better to spam everyone from Consumerist (twice!) to a random “Redneck Zionist” with a link to her video.
Yes, Roni, we saw your video. And we laughed at it. Hard.
In a related note, this is not an endorsement but it appears that @IRSHelpOk is doing it right. Check out the many not-quite-specific-but-pretty-easy-to-figure-out digs at those who don’t obey the rules of their state bar association.
Now that Tax Lady Roni Deutch has been forced to abdicate her royal tax credentials due to pressure from the State Bar of California and the fact that she’s completely broke, one has to wonder, “what will happen to all those people that watched late-night TV and called TLRD for help?” That’s a good question! Roni would sure like to know, since the California Bar said she had to lose her marbles or be six feet under for them to help out. Based on the press conference from last week, she doesn’t seem to be dead (far from it, in fact) but committable? You be the judge:
When I was in college I had a roommate who had an odd taste in television. Sure, he liked some sports, Adam Sandler movies and free soft-core porn like the rest of us but what he really enjoyed, what he absolutely relished in, was infomercials.
He recited Ron Popeil demonstrations like he wrote the script. He even took the human interaction down to the psych level (it was his major, after all), telling me that he thought Ron was belittling Nancy for her perpetual doubt about the capabilities of any invention that Ron’s brain could muster. I always thought that Ron was simply too passionate about his products and was simply bringing that passion out in responding to Nancy. That, plus his machines have the noise-making capability of a bulldozer, so he had to yell over them. This usually resulted in a shouting match between myself and my roommate and then we probably got blind drunk.
Anyway, I bring all this up because ol’ Ronny has himself a tax issue in California with Ronco Inventions, LLC and it’s Robert Snell’s tax delinquent scoop du jour:
According to public records, Ronco Inventions LLC owes the state $170,392 in delinquent taxes — or three easy payments of $56,797. Ronco is famed for products such as the parody-worthy Veg-O-Matic, the Pocket Fisherman, and rotisserie ovens. Popeil has turned the infomercial into an art form thanks to catch phrases — “Set it, and forget it!”, “But wait, there’s more!” — and studio audience members who clap like their lives depend on it.
Since Ron is the brains of Ronco, it’s likely that he treats tax issues much like he treated Nancy: with spirited indifference. Which now leads me to wonder if she’s the one in charge of the accounting department. Judge for yourself: