Roni Lynn Deutch talks in exclamation points about, well, lots of things — “I’m a baseball freak!” I’m not your typical geek tax attorney!”
There’s only one response to the latter: She’s not kidding!
Television viewers across the country know Deutch as the “tax lady” whose in-your-face commercials generate buzz even among those who aren’t necessarily looking for a way to escape the clutches of the taxman.
Although she’s tasted success with her tax-resolution legal practice, Deutch isn’t putting any periods on her aspirations. She is taking on a new franchise venture, Roni Deutch Tax Centers, with nothing less than market domination in mind.
“This is going to be huge!” promised Deutch, 43. “I don’t want to have five stores. I want 1,000 stores! I want to be H&R Block-huge!”
To pull it off, the tax lady is teaming up with a payday lender, a “strategic alliance” that will likely produce a polite shudder in some legal circles where such lenders are viewed as preying upon the people who can least afford to borrow.
Deutch said the partnership makes good business sense because her clients fit much the same demographic as customers in the $45 billion payday-lending segment.
These companies tend to draw borrowers who hold their jobs for less than five years, earn $25,000 to $50,000 a year and typically rent their homes, according to the Consumer Federation of America, based in Washington, D.C, The median age is 32.
One key statistic that Deutch cites for the deal: Her clients have about a 50 percent chance of getting a tax refund.
“They literally take the check into the [payday lender's] location,” she said.
For Deutch, the potential synergies outweigh the stigma attached to an industry where interest rates average 400 percent. She’s sold on her new partner, Money Mart, even though it drew fire in April from San Francisco City Attorney Dennis J. Herrera.
In a lawsuit, he alleged that Money Mart, based in Victoria, B.C., employed an “illicit lending scheme that would make a loan shark blush” by marketing short-term installment loans — at illegal triple-digit interest rates — to low-income borrowers.
Money Mart representatives did not return calls requesting comment. In a payday loan, a customer provides the lender with a postdated check in exchange for cash.
Deutch said she was surprised to hear of the allegations against her new partner.
Deutch’s franchised tax centers would join a market that is as competitive as it is lucrative.
More than 90,000 firms vied last year for a piece of the massive $65 billion U.S. accounting and tax-preparation market, according to Research and Markets, which tracks market trends.
Deutch made a believer out of 50-year-old Kenneth Cushman, a roofer for nearly 30 years before striking out on his own as a handyman in 2003.
The self-proclaimed “little guy” ended up owing $20,000 in back taxes to the IRS. The Sacramento resident called Deutch’s North Highlands offices to try to find a way out of the hole. At $420 a month for five years, Deutch’s attorneys drafted an installment plan with payments reasonable enough to whittle down Cushman’s tax debt.
“They kept the IRS off my doorstep, put me in a payment plan,” Cushman said. “A lot of little guys get behind. The IRS got real stinky with me. They figure you’re poor, you can’t afford a lawyer, but once I got Roni, they backed the hell off of me. [Deutch] gave me a way out. They helped me find a way.”
By Darrell Smith for The Seattle Times