Michael Simmrin (Criminal Lawyer)
The Numbers You Need to Know
| Legal Issue | Status | Key Details |
| Federal Enforcement | None | Zero FTC actions, no criminal charges, no DOJ proceedings |
| Consumer Complaints | 200+ in 3 years | BBB shows 65-67 annually with consistent patterns |
| Employment Class Action | Active | Maricela Reiter wage/hour case filed Dec 2022, seeking $4,000/employee penalties |
| Sexual Harassment Lawsuit | Ongoing | John Doe v. Tax Rise naming CEO Essam Abdullah personally (July 2022) |
| Previous Employment Settlement | Paid | Carl Cyrus case settled with confidential terms (2020-2022) |
| TCPA Violations | 2 federal cases | Unlawful telemarketing allegations in California and Texas |
| State AG Actions | None found | Despite nationwide operations and complaints |
| BBB Rating | A+ accredited | Maintains high rating while BCA gives F rating |
| Complaint Resolution | 23% | Business Consumer Alliance data shows poor outcomes |
| Average Client Fees | $2,700-$7,500+ | For services often worth $31 (or free) if done directly with IRS |
Company Profile: TaxRise, founded 2017 in Irvine, California by CEO Essam Abdullah. 150-200 employees. Estimated $30-32 million annual revenue. Operates nationwide through aggressive TV and digital marketing.
The Core Problem: TaxRise charges thousands of dollars for tax resolution services mostly standard IRS payment plans customers could arrange themselves for free or $31. They’ve avoided the fate of predecessors (JK Harris, TaxMasters, American Tax Relief) who faced $100M+ judgments by using mandatory arbitration clauses that block consumer class actions.
Three Weeks of Digging Led Me Here
A client walked in three months ago. She’d paid TaxRise $6,500 to “settle” her $42,000 IRS debt. What did they deliver? A standard installment agreement she could’ve set up herself on IRS.gov in 20 minutes. For $31.
That conversation sent me down a rabbit hole. Court records. BBB complaints. Federal databases. State AG actions. What I found wasn’t a smoking gun it was an absence where consequences should exist.
What This Investigation Uncovered?
No Federal Enforcement Despite Red Flags: Zero FTC actions against TaxRise despite operating in an industry the FTC specifically targeted with 2010 regulations. The company engineered around rules through “investigation fees” and two-phase pricing.
Employment Cases Tell the Real Story: While consumer complaints hit 200+, actual litigation centers on employment violations. Active wage/hour class action alleges systematic Labor Code violations. Sexual harassment case names CEO personally for alleged inappropriate conduct during job interview.
Mandatory Arbitration Blocks Class Actions: Customer contracts contain arbitration clauses with class action waivers, preventing the aggregation of consumer claims that destroyed similar companies. This explains why 200+ complaints generated zero consumer lawsuits.
The BBB Paradox: A+ rating with Torch Award for Ethics, yet Business Consumer Alliance gives F rating noting only 23% complaint resolution. TaxRise mastered responding to complaints without actually resolving them favorably.
Industry Context Matters: Predecessors faced catastrophic enforcement TaxMasters got $195M judgment, American Tax Relief $103M, JK Harris bankruptcy after 18 state AG lawsuits. TaxRise learned how to stay just-barely-legal.
Now let’s dig into what’s actually happening in courtrooms…
The Lawsuits That Do Exist (They’re Not What You’d Expect)
Federal Courts: Phone Calls, Not Fraud
I searched PACER expecting consumer fraud class actions. Found three cases about telemarketing instead.
Micah Watkins v. Tax Rise Inc. (Central District CA, Case No. 8:2020cv00029, Jan 2020) – TCPA violations for allegedly calling cell phones without permission. No public resolution.
Travis McClinton v. Tax Rise Inc. (Western District TX, Case No. 5:22-cv-00298, March 2022) – Same allegations. Same silence.
Homayoun Sadr-Arhami v. Tax Rise Inc. (Central District CA, Case No. 2:20-cv-06862, July 2020) – Dismissed “with prejudice as to plaintiff but without prejudice to putative class” (May 2021). That unusual dismissal structure screams settlement where plaintiff got paid but class claims stayed alive. Nobody picked up the torch.
What’s missing: Zero consumer fraud class actions. No FTC enforcement. Nothing from CFPB. That absence is the story.
State Courts: Employment Cases Tell Different Tale
Maricela Reiter v. Tax Rise Inc. (Orange County Superior Court, Case No. 30-2022-01295537, Dec 2022)
Putative class action alleging systematic wage violations:
- Unpaid minimum wages and overtime
- No meal/rest breaks (or premium pay)
- Unreimbursed business expenses
- False wage statements (up to $4,000 penalty per employee under CA Labor Code § 226)
- Waiting time penalties
Complaint alleges TaxRise “willfully, knowingly and intentionally” failed to pay proper compensation to increase profits. Case status unclear likely confidential settlement negotiations.
Carl Cyrus v. Tax Rise Inc. (Orange County, Case No. 30-2020-01126871, Jan 2020)
Similar wage/hour allegations. Settled with settlement administrator handling disbursements August 2022-2023. Terms confidential. So TaxRise has done this before.
John Doe v. Tax Rise Inc., Essam Abdullah and Miadvg LLC (Orange County, Case No. 30-2022-01270890, July 2022)
This one’s different. Sexual harassment during job interview. Plaintiff uses pseudonym “to preserve confidentiality and avoid potential vilification.”
Allegations: During January 13, 2022 interview, CEO Abdullah allegedly “leered at Plaintiff’s crotch,” commented on “fit of the suit around Plaintiff’s pelvic region,” and stated “You walked in with a package” while referring to plaintiff’s crotch.
Abdullah named individually, not just corporately. No public resolution. Still pending.
Pattern emerging? Employment issues + previous settlement + ongoing cases = workplace culture problems beyond wage violations.
The 200+ Consumer Complaints Nobody Can Sue About
Hours reading BBB complaints. Same patterns repeatedly:
Sales Pitch: “90% debt reduction,” “you’ll qualify for Offer in Compromise,” “pennies on the dollar,” “IRS Fresh Start Program” (that’s real but doesn’t require paid help).
Reality: Standard installment agreements customers could arrange themselves. IRS OIC acceptance rate is only 43% even for qualified applicants most don’t qualify at all.
The Fee Structure
Phase 1: $375-$500 “investigation fee” (non-refundable)
Phase 2: $2,700-$7,500+ “resolution fee”
Genius legal engineering. “Investigation fee” isn’t an “advance fee for debt relief services” under FTC rules. Just payment to see if you qualify. Then you pay more.
The Predatory Lending Angle
Multiple BBB complaints describe being pushed toward loans from United Consumer Financial (UAS). Process:
- Customer can’t afford $7,000 upfront
- TaxRise connects with lender
- Lender pays TaxRise immediately
- Customer owes lender with interest
- TaxRise has zero incentive to deliver already paid in full
One complaint: Client for three years, $7,000 paid, “no compromise has ever been proposed or presented.”
Unauthorized Charges
Elliott Advocacy documented case (Jan 2024): Jack Maxfield told TaxRise not to charge. They did anyway $900. Bank initially sided with TaxRise. Reversed only after advocacy.
July 2025 BBB complaint: “Agreed to $500 investigation fee, they months later authorized multiple payments up to $3000 with no email or phone contact… couldn’t even pay my bills this month because of Taxrise fraudulent charges.”
If accurate? That’s potentially criminal. Unauthorized use of payment information can constitute fraud or theft.
When Customers End Up Worse
BBB complaint: “Now I owe $10k MORE than I did when I started.”
Another: Hired Feb 2024 for $2,000. No action until October eight months. Filed wrong paperwork causing “thousands of additional dollars” owed. TaxRise response when asked to fix their error? “Case was closed, any further help would come at additional charge.”
What A Tax Pro Says
Logan Allec, CPA and tax attorney, blunt verdict: “TaxRise is not worth the money.”
Documented false marketing claims (Aug 2023) advertising “2023 Fresh Start Program” when IRS made no such announcement. Cited extreme review: “Biggest scam on earth… con artists… extort me out of $7,000 from some shady loan company.”
The BBB A+ Rating with F Grade Elsewhere
TaxRise: A+ BBB rating. Accredited. Torch Award for Ethics.
Business Consumer Alliance: F rating. Only 23% complaint resolution.
How? BBB rates on: time in business, response rate, professional memberships, advertising practices, paying accreditation fees. NOT whether customers get value or favorable outcomes.
TaxRise responds to complaints with “we followed contract terms” or “fees are non-refundable per agreement.” Technically responsive. Substantively useless.
BCA rates on outcomes. Do customers get satisfactory resolution? 77% of time: no.
Why Nobody’s Stopping Them: The Regulatory Black Hole
FTC’s 2010 Debt Relief Rule Doesn’t Apply
FTC amended Telemarketing Sales Rule in 2010 banning advance fees for debt relief services. But FTC deferred enforcement against tax debt relief ambiguity about whether tax debts are “unsecured consumer debt” under the rule.
TaxRise lives in that gray area. Plus their two-phase fee structure technically complies even if the ban applied. “Investigation fee” isn’t advance payment for debt relief it’s payment for investigation service.
Legal jujitsu. Probably compliant. Same economic effect.
Zero State AG Actions
Searched AG databases in California, Texas, New York, Florida, South Carolina. Nothing. Yet predecessors got destroyed by state AGs Texas AG’s $195M judgment against TaxMasters, 18 states sued JK Harris.
Why not TaxRise?
Theory 1: Mandatory arbitration blocks visibility. No public court records. No media. AGs don’t see the pattern.
Theory 2: Complaints dispersed across 50 states. 200 complaints ÷ 50 states = 4 per state annually. Below investigation thresholds.
Theory 3: Maybe investigations are ongoing but not public yet.
Theory 4: Industry learned to stay just-barely-legal. TaxRise watched predecessors get obliterated, studied the mistakes, engineered around them.
I’m betting on Theory 4.
IRS Circular 230 Limitations
IRS Circular 230 prohibits unconscionable fees, false statements, incompetent conduct by tax practitioners.
But it regulates individual practitioners, not company business models. Sales people making promises? Not tax professionals, so not covered. Tax professionals delivering technically-competent-but-low-value services? Not Circular 230 violations.
Wrong tool for the problem.
If You’re Considering TaxRise (Or Already Hired Them)
Don’t Hire Them
Before paying anyone $5,000, try this:
- Call IRS directly at 1-800-829-1040
- Check IRS Payment Plan options online – $31 fee or waived
- See if you qualify for Offer in Compromise (spoiler: probably not)
- Low Income Taxpayer Clinics provide free help
If you need professional help, hire local Enrolled Agent or tax attorney directly. Not a marketing company. Fees typically $150-$300/hour.
Already Hired Them?
Your options suck because of arbitration:
- File individual arbitration (pay arbitration fees, unlikely to win given contract terms)
- Complain to regulators (FTC, BBB, your state AG, IRS) – creates paper trail but probably no money back
- Credit card chargeback if unauthorized charges within 60 days
- Cut losses – stop paying, fire them, handle IRS yourself
Class action? Near zero chance. Arbitration clause blocks it. Individual lawsuit? Economics don’t work for $2,000-$7,000 claims.
What This Investigation Revealed
TaxRise engineered a business model that’s probably technically legal, definitely ethically questionable, practically immune to normal consumer protection mechanisms.
They learned from predecessors who faced catastrophic judgments. Not by fixing the model by fixing the legal vulnerabilities. Arbitration clauses suppress class actions. Two-phase fees navigate FTC rules. Just enough service delivery to claim contract fulfillment. Dispersed complaints avoid AG attention.
The brutal truth: spent 40+ hours researching this article. Could help most TaxRise customers set up IRS payment plans themselves in 30 minutes.
That’s the industry.
Until FTC decides this is priority or state AGs coordinate multi-state action or mandatory arbitration gets reformed, TaxRise will keep doing exactly what they’re doing. Making millions. Generating complaints. Facing no consequences.
The tax resolution industry exists because Americans panic about IRS debt and don’t know they can handle it directly. Companies exploit that knowledge gap. Charge thousands for $31 worth of value.
Our regulatory system reacts to catastrophic harm after thousands get defrauded. Doesn’t prevent it. That’s backwards.
