By Texas Parole 
This article is for informational purposes only and does not constitute legal advice. Consumers facing tax debt should consult a qualified attorney, certified public accountant, or enrolled agent for personalized guidance. The information presented here is based on publicly available court records, regulatory warnings, and consumer reports as of February 2026.
Introduction
TaxRise, a California-based tax resolution company, has faced scrutiny through legal actions and numerous consumer complaints, raising questions about its practices in the tax relief services industry. While no large-scale class action lawsuit directly tied to deceptive marketing practices or tax debt settlement failures has been filed against the company as of early 2026, several lawsuits involving employment disputes and violations of the Telephone Consumer Protection Act (TCPA) have been documented. Additionally, hundreds of complaints filed with the Better Business Bureau (BBB) highlight issues like failure to deliver promised results, unauthorized charges, and poor communication—concerns echoed in reviews on platforms like Trustpilot and Reddit.
This matters now because tax debt can be overwhelming, especially amid economic pressures, and consumers researching tax resolution companies often encounter aggressive advertising promising quick fixes through programs like the IRS Fresh Start Program. Individuals struggling with IRS or state tax debt, current TaxRise clients worried about the company’s reputation, and those investigating potential tax relief scams could be impacted. Understanding these legal and consumer issues can help you make informed decisions and avoid pitfalls in seeking tax debt settlement or other remedies.
Background & Legal Context
TaxRise, headquartered in Irvine, California, offers tax relief services aimed at helping clients resolve IRS and state tax debts. The company advertises expertise in negotiating with tax authorities, filing back taxes, and utilizing federal programs like the IRS Fresh Start Initiative, which includes options such as Offer in Compromise (OIC), installment agreements, and Currently Not Collectible (CNC) status. Founded in the late 2010s, TaxRise positions itself as a full-service firm with certified professionals, boasting high client satisfaction ratings on some platforms—such as a 4.7/5 on Google Reviews from over 9,000 reviews. However, the tax relief industry as a whole has a history of regulatory oversight due to deceptive practices.
The broader legal context involves federal and state consumer protection laws. The Federal Trade Commission (FTC) regulates advertising in tax relief services, prohibiting false claims about debt reduction or government affiliations. For instance, in October 2025, the FTC and the State of Nevada sued American Tax Service (unrelated to TaxRise) for falsely impersonating the IRS and promising unrealistic debt settlements. Similarly, the IRS warns against “tax relief scams” that charge high fees for services consumers can often handle themselves or through free IRS resources. State attorneys general also investigate complaints under laws like California’s Unfair Competition Law (Bus. & Prof. Code § 17200), which addresses misleading business practices.
Prior rulings in the industry set precedents: In cases like FTC v. Ideal Financial Solutions (2015), courts have imposed penalties for deceptive telemarketing in debt relief. Employment-related lawsuits, governed by the Fair Employment and Housing Act (FEHA) in California, emphasize workplace protections, while TCPA cases under 47 U.S.C. § 227 focus on unsolicited communications, with potential statutory damages up to $1,500 per violation.
Key Legal Issues Explained
The known lawsuits against TaxRise primarily fall into two categories: employment disputes and TCPA violations, rather than direct challenges to its tax resolution services. However, consumer complaints often allege issues akin to unauthorized practice of law or deceptive marketing, which could invite future scrutiny.
- Employment Disputes: A 2022 complaint filed in Orange County Superior Court by “John Doe” against TaxRise Inc., MIADVG LLC, and Essam Abdullah (aka Sam Price) alleged sexual assault, gender violence, discrimination, harassment based on sex and sexual orientation, and retaliation under FEHA (Cal. Gov. Code §§ 12940(a), (j), (h)). The plaintiff sought monetary and punitive damages. This case illustrates common legal procedures in employment law, including filings, potential discovery phases, and settlements or trials. While not directly related to consumer services, such disputes can signal internal issues affecting operational reliability.
- TCPA Violations: In Micah Watkins v. Tax Rise, Inc. (filed January 2020, U.S. District Court, Central District of California), the plaintiff alleged unsolicited calls or texts without consent, a federal question under 28 U.S.C. § 1331. The case proceeded through discovery and motions before settling and being dismissed without prejudice in July 2021. Similarly, Homayoun Sadr-Arhami v. Tax Rise Inc. et al. (filed July 2020) involved TCPA claims for unwanted communications, dismissed in May 2021. These highlight TCPA requirements for prior express consent and opt-out mechanisms, with evidence often including call logs and consent forms.
- Consumer Protection Concerns: Although no class action for deceptive practices has materialized, BBB complaints frequently cite failures in tax debt settlement, such as promising 80% reductions but delivering minimal savings (e.g., $11/month reduction after $8,000 in fees). Issues like money-back guarantees not honored or unauthorized charges align with FTC warnings on tax relief firms. The unauthorized practice of law—offering legal advice without licensed attorneys—remains a risk, as bar associations regulate such activities.
In plain terms, these issues mean consumers must verify a company’s claims against IRS guidelines. For example, an OIC under the Fresh Start Program requires proving inability to pay, not a guaranteed “pennies on the dollar” outcome.
Latest Developments or Case Status
As of February 2026, the employment lawsuit from 2022 appears resolved or inactive based on public dockets, with no recent filings noted. The TCPA cases concluded via settlements in 2021, without admissions of liability. No new federal or state investigations by the FTC or attorneys general specifically targeting TaxRise have been announced, though general industry actions continue, such as the 2025 FTC suit against similar firms.
Consumer complaints persist: The BBB reports 637 total complaints over three years, with 269 closed in the last 12 months, focusing on service failures and refunds. Recent examples include unauthorized $300 withdrawals and unprevented IRS levies despite promises. On X (formerly Twitter), users have shared scam warnings and lawsuit intentions, but no verified actions.
TaxRise maintains an A+ BBB rating and accreditation, responding to many complaints with resolutions like partial refunds. However, mixed reviews on Trustpilot (4.3/5 from 2,192 reviews) include praises for communication but criticisms for high fees and minimal results.
Who Is Affected & Potential Impact
Primarily affected are individuals with IRS or state tax debt exceeding $5,000 (TaxRise’s minimum), including those in financial hardship seeking relief through programs like OIC or CNC. Current clients facing liens or garnishments despite engagements may experience worsened situations, as seen in complaints where debts increased due to delays.
Potential impacts include financial harm from fees (often $4,000–$15,000) without proportional savings, emotional stress from unfulfilled promises, and legal risks like IRS enforcement actions. For the industry, ongoing complaints could lead to stricter regulations, similar to FTC’s 2023 warnings on data misuse in tax prep. Businesses or high-net-worth individuals might face similar issues but have more resources for alternatives.
| Group Affected | Key Risks | Potential Consequences |
|---|---|---|
| Consumers with Tax Debt | Deceptive promises, high fees | Increased debt, liens, garnishments |
| Current TaxRise Clients | Poor communication, no results | Financial hardship, need for refunds |
| Tax Relief Industry | Regulatory scrutiny | Fines, business closures |
What This Means Going Forward
The absence of a major consumer class action suggests TaxRise operates within legal bounds for its core services, but the volume of complaints underscores the need for caution in tax resolution companies. Legally, this highlights the importance of verifying claims against IRS standards—e.g., only about 40% of OICs are accepted annually. Industry-wide, expect more FTC oversight on marketing, potentially requiring clearer disclosures.
Consumers should monitor BBB updates, file complaints with state attorneys general if needed, and consider free IRS tools like the Taxpayer Advocate Service. Alternatives like Community Tax or Optima Tax Relief may offer similar services with varying reviews; compare via independent sources. Watch for any 2026 developments, such as new filings or settlements.
Frequently Asked Questions
Is TaxRise a legitimate company?
TaxRise is a registered business with BBB accreditation and an A+ rating, offering tax relief services nationwide. However, it has faced lawsuits for TCPA violations and employment issues, plus over 600 BBB complaints alleging service failures. Legitimacy depends on individual experiences; research thoroughly.
What is the TaxRise class action lawsuit in 2024?
No class action lawsuit was filed against TaxRise in 2024 for consumer practices. Existing suits are individual TCPA cases from 2020–2021, settled without broader implications. Complaints often call for class actions, but none have materialized.
What are common TaxRise complaints and reviews?
Reviews are mixed: Positive for communication (4.3/5 on Trustpilot), negative for high fees, minimal debt reductions, and unprevented IRS actions. BBB logs issues like unauthorized charges and no refunds.
How to get a refund from TaxRise?
Contact TaxRise directly; some complaints report partial refunds after escalation. If unresolved, file with BBB, your state attorney general, or consider small claims court. Review your contract for money-back guarantee terms.
What is the TaxRise lawsuit California complaint?
The 2022 Orange County case involves employment allegations under FEHA, not consumer services. TCPA suits were federal.
What are problems with tax resolution companies like TaxRise vs. others?
Common issues include overpromising results and high fees. TaxRise requires $5,000 minimum debt; competitors like Anthem Tax Services may have lower thresholds but similar complaints. Always compare via IRS-approved providers.
Conclusion
While TaxRise provides tax relief services and has resolved many client debts, the lawsuits for TCPA and employment issues, combined with persistent consumer complaints about deceptive practices and service failures, warrant careful consideration. This underscores the public interest in transparent tax resolution, protecting vulnerable consumers from potential scams. Stay informed through reliable sources like the IRS and FTC, and seek professional advice to navigate tax debt effectively.
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