Attorney-at-Law

THEY WERE WARNED; THEY WERE GIVEN AN EXPLANATION; THEY PERSISTED

In Uncategorized on 08/09/2017 at 11:07

No, this is not becoming a political blog. I just needed a snappy headline to pick up on a case that I had given a pass the other day.

My colleague Peter Reilly, CPA, over at Forbes, e-mailed me yesterday afternoon to ask if I’d passed over BCP Trading and Investments, LLC, William T. Esrey Trading Partners, LP, A Partner Other Than The Tax Matters Partner, 2017 T. C. Memo. 151, filed 8/7/17.

I replied thus: “yes, I pass. I’ve blogged the Son-of-Boss mix-and-match many times, and there’s nothing new here but a few extra window-dressing layers. The SOL waiver issue is really fact-based, and everybody who claimed E&Y sold them out had lawyered up long before. AFAIK, no one ever won a Son-of-Boss in Tax Court or on appeal. So I really have nothing new to say.”

So I left it at that, went home, had a Gibson, had dinner, went to sleep.

But this morning I had a thought to put in a blog. I was reminded of the circumstances wherein the title hereof, somewhat altered, arose, by a few of Judge Holmes’ sentences in BCP. Try this.

“LeMay even received a call from a reporter at the New York Times asking him about the E&Y investigation in 2003. Given their close relationship, we find it more likely than not that he told Esrey about the call. In May 2004 Esrey hired Baker & McKenzie and LeMay hired Arnstein & Lehr to represent them before the IRS. These facts lead us to find that Esrey and LeMay understood far more than they let on and undercut their claim that they blindly relied on E&Y.

“As for Kalkhoven and Pettit, E&Y told them in May 2002 that it was giving the IRS documents related to ‘certain transactions in which you were involved.’ E&Y told them to speak with McKee Nelson if they had concerns. Kalkhoven and Pettit hired Fulbright & Jaworski and Vinson & Elkins in September 2004 to represent them before the IRS. With these law firms representing them, Kalkhoven and Pettit didn’t object to Bolton’s continuing to sign extensions through April 2007. Given these facts, we cannot believe that E&Y manipulated Bolton into signing the 2004 Form 872-P and hid its intent from Kalkhoven, Pettit, Esrey, and LeMay as they claim.” 2017 T. C. Memo. 151, at p. 44.

Takeaway: If you wish to plead your injured innocence, please make sure you lawyer up only after the fact. If you don’t, the weight of those white shoes may sink you without trace.

 

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