Try Chutzpah

I won’t give Blonde Grayson Hall, 2013 T. C. Memo. 93, filed 4/4/13, a Taishoff “good try”, because it wasn’t. I must admit Blonde showed a high level of chutzpah, first by not bothering to file four years’ worth of tax returns (like a certain former mayor of Our Fair City), second by copping a plea to three counts of willful failure to file (Section 7203), in which copping she agreed to sign and did sign a Form 4549, agreeing to the tax assessed and interest and penalties, after a proper allocution by the US District Judge; third by paying the tax but not the interest and penalties (about $322K worth), and fourth, when IRS filed a NFTL, by claiming she signed the 4549 under duress.

She never appealed the sentence (a year hard), but her husband did, and Third Circuit (Blonde was a PA resident) affirmed.

I won’t go through Judge Ruwe’s lengthy (I won’t say over-lengthy) review of the law of duress, except to say that when offered a plea by the US Attorney’s Office, you can always take your chances with a jury. If you choose to forgo that course of action, it’s not duress. And complying with law, when there’s serious hurt if you don’t, is by definition not duress.

So the NFTL is sustained as to Blonde.

Careful observers will note that this opinion is captioned Blonde Grayson Hall and Neal E. Hall, giving rise to the question “so what’s Neal’s story”?

Well, first there’s a NOD from Appeals sustaining IRS’ filing against Blonde for her four years. But she and Neal also didn’t bother paying taxes for four more years after that, so there was a NOD for those. These two are quite a pair.

Blonde plays the “duress” card, so IRS moves to sever Blonde from Neal, to consider Blonde’s claim. See Rule 141(b), which provides “(T)he Court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition or economy, may order a separate trial of any one or more claims, defenses, or issues, or of the tax liability of any party or parties.”

I note in passing that Blonde was a lawyer, admitted in Our Fair State in 1985, but currently under suspension until she straightens out her tax issues. See Matter of Hall, 67 AD3d 32 (AD 1, 2009), and 2012 NY Slip Op. 65645(U), (AD 1, 2012).

I should also note that Blonde told the NY App Div that her tax problems stemmed from being “exhausted”, and not from venality.

I can testify from my personal knowledge and experience that lawyers are often exhausted; but some of us actually file returns and pay taxes. And if we sign a 4549, that’s it.