Balkinization: Lawyers Charged with Criminal Conspiracy for Legal Opinions

Lawyers Charged with Criminal Conspiracy for Legal Opinions

Brian Tamanaha

The Department of Justice recently indicted a number of tax lawyers for issuing fraudulent legal opinions designed to shield clients from criminal prosecution.

In order to encourage clients to participate in the shelters, and to shield the clients from substantial penalties that could be imposed if the IRS disallowed the claimed tax benefits, the [lawyer] defendants conspired to provide J&G's clients with opinion letters which claimed the tax shelter losses or deductions would "more likely than not" survive IRS challenge. The defendants knew those opinions were based on false and fraudulent statements, and omitted material facts. By helping their clients obtain false and fraudulent opinion letters, with the understanding and intent that those opinion letters would be presented to the IRS if and when the clients were audited, the defendants sought to undermine the ability of the IRS to ascertain the clients' tax liabilities and determine whether penalties should be imposed.

Predictably, the lawyers expressed disappointment at the indictments, claiming that they had rendered good faith interpretations of the law.

Posted 9:44 AM by Brian Tamanaha [link]

Comments:

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# posted by

Joe : 10:02 AM

"Predictably, the lawyers expressed disappointment at the indictments, claiming that they had rendered good faith interpretations of the law."

That claim of "good faith" might be tested by tax savings and the legal fees generated by these tax shelter opinions, in addition to the documents "gag" requirements imposed by tax shelter attorneys on their clients to limit replication of such opinions by other coattail riding attorneys.

# posted by

Shag from Brookline : 10:27 AM

This is the level of conspiracy that would be necessary to gain a ham sandwich indictment against Yoo and Bybee.

Even this particular ham sandwich indictment has a nasty aroma about it. Identifying ways to reduce the tax liability of clients is the entire purpose of tax attorneys. The indictment appears to be damn thin in describing how the legal opinions were wrong as a matter of law. Given how indeterminate tax law can be, this is unsurprising. The indictment instead sounds like Justice is making it a crime to render a legal opinion that reduces taxes paid to the IRS.

# posted by

Bart DePalma : 10:29 AM

When our resident LLB* invades one of my legal specialty turfs with this:

"The indictment instead sounds like Justice is making it a crime to render a legal opinion that reduces taxes paid to the IRS."

it must be pointed that he doesn't know tax law from Shinola. Strict standards have long been in place regarding tax shelter opinions that cost the fisc dearly and thus increase deficits. The Beatles' "Gimmee Shelter" was not about taxes.

By the Bybee, the "sangwich" would include Bradbury, a "BYB" on wry [sic].

*Little Lisa's bro

# posted by

Shag from Brookline : 11:39 AM

Shag:

Tax law is not my specialty and I was going by the linked Justice announcement.

I defer to your superior expertise in this area.

Can you figure out from the announcement what law the attorneys were misrepresenting?

# posted by

Bart DePalma : 11:46 AM

Unless Jagger/Richards wrote "Gimme Shelter" for the Beatles, I believe Shaq is conspiring with the surviving Beatles to increase their royalties. Call DOJ. Damn kids with their rock n' roll.

# posted by

TomMil : 12:00 PM

So let's see if I understand this correctly. Our government can shut down tax evasion but not war crimes.

In engineering, you're only as important as the problems you can solve.

I put it to you we have a junior level government. Wouldn't give it any important projects.

# posted by

jpk : 12:27 PM

Bart: Care to restate your opinion without begging the question? Fallacious arguments do nobody any favors and are merely a waste of space.

# posted by

Eric : 1:07 PM

The Rolling Stones knocked over the shelter I erroneously gave to the Beatles, leaving me behind clinging like moss all alone now on the lee side, homeless, clientless. Alas, the memory is the second thing to go.

# posted by

Shag from Brookline : 1:25 PM

Alas, the memory is the second thing to go.

Second? Oh dear, was there something else?

# posted by

CTS : 3:58 PM

CTS:

"Second? Oh dear, was there something else?"

I forget!

# posted by

Shag from Brookline : 4:07 PM

Shag: I forget!

Whew.

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# posted by

AntoL-Nyo : 8:33 AM