"Tax Lady" Roni Deutch says California Attorney General Jerry Brown is engaging in election year politics by filing a lawsuit accusing her law firm of false advertising and misleading consumers.

Deutch said in a statement Tuesday that she will fight the $34 million lawsuit filed a day earlier in Sacramento County Superior Court by Brown, the Democrats' nominee for governor.

She says her firm has saved thousands of people tens of millions of dollars through negotiations with the Internal Revenue Service over nearly 20 years.

The suit accuses her of vastly overstating the number of delinquent taxpayers she has helped. The suit also alleges she ran up clients' fees through false billings.

Brown spokeswoman Christine Gasparac says the lawsuit is backed by evidence gathered during a monthslong investigation.

Many Americans could be hit with a big tax increase in the next two or three years despite President Barack Obama's repeated promises to shield the middle class from higher rates.

Democrats are hedging about making Obama's pledge stick for more than a year or two, setting up a major battle on a super-sensitive subject just before the November elections.

With the most sweeping tax cuts in a generation due to expire in January, the Democrats are divided over whether the government can afford to make any of them permanent — especially with voters increasingly upset over the fast-rising federal budget deficit.

Party lines are clear on part of the issue: Most Republicans want to permanently extend all the tax cuts enacted during George W. Bush's presidency, nearly $3 trillion worth over the next decade. Democratic leaders want to let the cuts for the wealthiest Americans expire.

The Democrats want to extend them for everyone else, but perhaps only temporarily, out of concern for the rising red ink. That's where Democratic lawmakers are struggling to find agreement.

Former Detroit Mayor Kwame Kilpatrick has returned to his hometown for his first court appearance since being indicted last month on tax and fraud charges.

Kilpatrick was arraigned Tuesday afternoon and a not guilty plea was entered at the request of his lawyer. Wearing orange jail clothes, Kilpatrick indicated that he can't can afford a lawyer and one will be appointed for him.

The judge could keep James Thomas on the job at the public's expense.

Kilpatrick is charged with tapping his charity the Civic Fund for cash and personal luxuries while he was mayor and not reporting it on his tax returns.

He has been serving time at a state prison for violating probation in a different criminal case. He will remain in federal custody while he awaits trial.