Attorney-at-Law

THE PERILS OF PAULINE

In Uncategorized on 09/22/2021 at 15:28

No, not the 1914 20-episode thriller that the Libe of Congress designated “culturally, historically, or aesthetically significant” in 2008. This one is none of the foregoing.

Rather, today’s perils fall not upon Pauline, but upon her trusty attorneys, whom I’ll call Jeff and Ken. Jeff and Ken are attorneys in a law firm called MIJS.

Captive microinsurance dodges are the latest clay pigeons in IRS’ trapshooter. I’ve blogged a bunch of these, a list of which you can find in Footnote 1 of Judge Gale’s order today in  Pauline W. Liu, et al., Docket No. 3101-20, filed 9/22/21* (a special day at our house).

I’ll defer to Judge Gale for the story.

“The record indicates that MIJS wholly owns the entity MIJS Captive Management, LLC (MIJS Captive), which in turn wholly owns the entity Patriotic RE Insurance Company, Inc. (Patriotic RE). The record also indicates that both MIJS Captive and Patriotic RE were connected to the primary issue in these cases; that is, both were involved in the purported captive insurance arrangement at issue. Moreover, in certain filings with the Court, MIJS Captive and Patriotic RE have both made broad, general assertions of attorney-client privilege, raising questions as to the degree of MIJS’s involvement in the planning or promoting of the aforementioned purported captive insurance arrangement.” Order, at p. 2.

This triggers a Rule 24(g)(1) show-and-tell, whereby Jeff and Ken can hand in a sworn statement dishing as follows: “(1) whether he was involved, directly or indirectly, in the planning or promoting of the purported captive insurance arrangement at issue in these cases, including any involvement in the provision of legal advice or opinions by MIJS to MIJS Captive or Patriotic RE regarding such arrangement, such as opinion letters upon which MIJS Captive, Patriotic RE, or petitioners may have relied in planning or promoting such arrangement; and (2) the extent, if any, to which he was involved, directly or indirectly, in the operations of MIJS Captive or Patriotic RE.” Order, at pp. 2-3.

If the answer is “yes” to any thereof, Jeff and Ken can also “(1) secure petitioners’ informed written consent, if he has not already done so; (2) withdraw from this case; or (3) take whatever other steps are necessary to obviate any conflict of interest or other violation of the ABA Model Rules of Professional Conduct. If Messrs. [Jeff and Ken] obtain (or have already obtained) petitioners’ informed written consent, then they shall attach such to the statement filed with the Court.” Order, at p. 3.

Taishoff’s addition: Jeff and Ken, be prepared for The Phone Call.  And the Perils of Pauline.

*Pauline Liu 3101-20 9 22 21

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