Tax Court Upholds Ruling Against Dead Lawyer

The New York Times reports that the United States Tax Court has reaffirmed a ruling finding that a once prominent tax lawyer, now deceased, had engaged in atax evasion scheme. The case has a long and tortured history, having been once to the Supreme Court already, and likely headed there for a second time. The IRS victory before the tax court may turn out to be a hollow one. The Tax Court’s first adverse ruling wqas overturned by the Supreme Court after it was revealed that the judgment against the Defendants was incinsistent with another Tax Court judge’s preliminary report, which found no evasion. That report was not disclosed before the initial ruling finding evasion was issued. The Tax Court justified this by asserting that the report in question was a part of its internal “deliberative processes.” The Supremes disagreed and reversed. The Tax Court – seemingly as dogged as its friends at the IRS – has again found evasion. The case appears headed back to the Supreme Court. I won’t predict the ultimate result, but let us say at least that this matter combines two of the more pernicious forces in operation since the turn of the last century – the IRS, and federal criminal prosecutors.