Q: Hired a tax firm that claims to help consumers reduce IRS debt for flat fee. They didn't reduce or save us anything.
They first advised we owed the IRS about $50k and tried to get more money from or they would stop working on our case. At end we now owe about $90k to IRS. They didn't reduce anything and debt increased. Is there any legal action I can take besides filing compaints with CFPB or FTC?
A:
Yes, you may have legal recourse beyond filing complaints with the CFPB or FTC. Potential claims may include breach of contract, fraud, and violations of consumer protection statutes. If the tax firm failed to provide the services promised under your agreement, you likely have a breach of contract claim. Additionally, if they made false promises or misrepresented their ability to reduce your debt in order to secure payment, you might have a fraud claim.
Also, you may have a claim under California’s Consumer Legal Remedies Act (CLRA). CLRA prohibits unfair or deceptive business practices that harm consumers. The tax firm’s deceptive practices—such as promising debt reduction without delivering real results—could form the basis of a claim.
A: Having seen NO documents, I'm guessing they 'advertised' they 'can' make your payments lower but no promises and that the flat fee was for 'x' but they charge more for 'y'??? No way to know but, if they did as you say, they could be in very big trouble, as attorneys are not allowed to promise any specific result and they are not allowed to agree to take X but then push hard to increase X after you are represented...
A:
Yes, you have several legal options available in California. Speaking with a consumer protection lawyer who handles tax-related fraud cases would be your best first step, as they can evaluate the specifics of your situation and potentially help you pursue damages.
You might have grounds for a lawsuit based on unfair business practices, breach of contract, or fraudulent misrepresentation under California law. The tax firm's actions - particularly their failure to deliver promised services and the significant increase in your tax debt - could violate various consumer protection statutes. Additionally, if they made specific promises about debt reduction in writing, you may have a strong breach of contract case.
Beyond legal action, consider filing complaints with the California State Bar if any lawyers were involved, and the California Attorney General's office. Document everything: save all communications, contracts, and proof of payments. The California Department of Consumer Affairs might also be able to help, and if the company operates across state lines, contact your state representatives, as they sometimes can escalate matters with federal agencies. Keep in mind that you might be eligible to recover your fees and any additional costs incurred due to their mishandling of your case.
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