Tax Roundup, 4/5/2013: Illegally Blonde edition. And: Vaudtitor vacates.

April 5th, 2013 by Joe Kristan

20130405-1So a Blonde and a lawyer walk into Tax Court.  She loses.

No, the Tax Court has not started to report petitioner hair color in its decisions, along with the names of the attorneys and the resident state (“petitioner resided in Iowa and was brunette during the tax years at issue but gray at trial”).   This taxpayer’s first name is actually Blonde.  And she was an attorney, at least until 2006, when she pleaded guilty to failure to file tax returns. From the Tax Court:

Since the only issue currently before the Court is whether Blonde Grayson Hall signed the Form 4549 under duress we will refer to Blonde Grayson Hall as petitioner.

Petitioner attended the University of Michigan Law School and was admitted to practice law in 1982. Petitioner was the chief executive officer of Hall & Associates, LLC, a law firm in Philadelphia, Pennsylvania, from 1995 to 2006.

As part of her plea deal, the taxpayer filed Form 4549 agreeing to assessment of additional tax liabilities for several tax years.  She apparently had second thoughts:

Thus, the issue before us is whether Blonde Grayson Hall should be relieved of her agreement in the Form 4549 because it was signed under duress.

Of course, duress is what a plea deal is all about.  You accept a bitter pill because you think it could get a lot worse if you go to trial.  While this is a fearsome and sometimes abused weapon in the hands of prosecutors, the Tax Court said it wasn’t the kind of duress that makes the Form 4549 go away (my emphasis):

The requirement that petitioner sign the Form 4549 stems from the Government’s efforts to prosecute her for admittedly criminal conduct and to collect taxes and penalties. No doubt, given the circumstances, these efforts were zealous and disadvantageous to petitioner. However, every criminal defendant who is offered a plea agreement faces an equally unpalatable decision — accept a legally authorized plea agreement that will include terms disadvantageous to the criminal defendant or go to trial which may result in significantly worse consequences for the criminal defendant. This unpalatable decision does not constitute duress or involuntariness.

The taxpayer is stuck with the Form 4549 that she signed.

The moral: If you plead guilty to criminal tax charges, it is very hard to fight the assessment for the years covered by the plea.  Even if you are a lawyer, and even if you are Blonde.

Cite: Hall, T.C. Memo 2013-93.


Iowa’s loss, Government accounting’s gain.  Iowa’s longtime State Auditor David Vaudt is leaving office to head the Government Accounting Standards Board.  He’s fought the good fight for honest reporting of state finance.  It will be hard to find a replacement as good.

His term in office has covered governors of both parties, all of whom found him more or less annoying with his objections to budgetary games.  His office did excellent work in the film credit scandal, issuing a comprehensive report showing that 80% of the credits were improperly granted.  Best of luck to him in his new job.


William McBride,  Standard Economics Says Capital Income Taxes Should Be Zero (Tax Policy Blog).  He quotes Garett Jones:

Under standard, pretty flexible assumptions, it’s impossible to tax capitalists, give the money to workers, and raise the total long-run income of workers.    

Not, hard, not inefficient, not socially wasteful, not immoral: Impossible

Yet the effort to do so never ends.  Nor the harm it causes.


Christopher Bergin, ‘Commissioner-Less’ (

The Internal Revenue Service is currently without a Commissioner. Douglas Shulman, the 47th IRS Commissioner stepped down last November.And from what I’m starting to hear, the IRS may not have a new Commissioner for as long as close to two years. That is not a good thing.

Still an improvement over the last one.


Eric Todor, Moving to a Territorial Tax May Not Be the Windfall Multinationals Expect (TaxVox)

David Cay Johnston, Unkind to Charity ( “The tax rules on charities, both the many good and the few bad, are about to get much more anti-giving.”


Jack Townsend, District Court Denies Bankruptcy Discharge for BLIPS Shelter Investor

Kay Bell, William Shakespeare, tax cheat

William Perez, GoodApril Online Tax Planning Application

Perverse incentives.  Whoa, Cowboy: Tax Laws May Make Romo Highest Paid NFL Player (TaxGrrrl)


News you can use: You Are a Terrible Investor and You Should Stop That (Megan McArdle).  Actually, it’s excellent advice that I try to follow.

Russ Fox,  Bozo Tax Tip #6: Just Don’t File.  It sure didn’t work for the Blonde.

Jim Maule,  How to Protest a Tax:

According to this report,  dozens of people supporting a bill to repeal a state sales tax on amounts charged by dance establishments decided to dance in protest. According to the report, the protestors demonstrated the salsa, the flamenco, the tango, and even a conga line. Considering the speed with which legislatures get things done, perhaps they engaged in some slow dancing, though the report does not mention it.

First they came after the big bands, but because I was a conga dancer, I did nothing.



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