Time: Fri Dec 05 02:14:00 1997
To:
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: Dishonor, Your Honor! (fwd)
Cc:
Bcc: sls
References:
<snip>
>
>Thanks to John McAlister for the site containing this article. One
>wants to cheer until reading the details of WHO the court sides with
>here. The stench should be unbearable to those who have had property
>seized by the IRS -- especially those who have argured lack of proper
>notice. Wheewww!
>
>ICE
>
>http://www.ljx.com/topstories/1203new1.html
>
> Court Awards Judge's Estate Fees From IRS
>
> The New York Law Journal
> December 3, 1997
>
> BY DEBORAH PINES
>
> THE INTERNAL Revenue Service has been ordered to pay $34,172 in attorney's fees and costs to a
> prominent Manhattan estate for a 4-1/2-year tax fight the estate won in the face of IRS conduct termed "abusive" by
> a federal judge.
>
> Southern District Judge Jed S. Rakoff ordered the money paid to cover costs incurred by the Estate of Paul P.
> Rao, a former Chief Judge and 40-year member of the former Customs Court who died in 1988. The court was
> renamed in 1980 the U.S. Court of International Trade.
>
> Judge Rakoff also ordered the payment to teach the IRS a lesson. "Given the abusive quality of the IRS's
> conduct in this case, the government should feel fortunate the fees were so modest," he wrote in Estate of Paul P.
> Rao v. United States, 97 Civ. 3455, filed Nov. 25.
>
> Judge Rakoff's ruling noted the tax fight began in earnest on May 21, 1993 when the IRS notified the estate it
> owed $273,465 in gift taxes. The estate offered repeated denials, by phone and in writing, that it owed that amount.
> It also denied receiving an earlier timely notice of the alleged deficiency which the IRS claimed it had sent in
> December 1992.
>
> "The IRS's only response was to file a notice of intent to levy on Sept. 19, 1994, and a notice of a federal tax
> lien on May 18, 1995," Judge Rakoff wrote.
>
> The estate then "attempted with vigor and persistence to bring the relevant facts to the IRS's attention, both
> orally and in writing, only to be met, as the government now concedes, with a wall of silence," the judge added.
>
> Finally, the estate filed suit in May in federal court claiming that the tax lien was void. In less than two
> months, "the IRS conceded that it made an error in assessing the deficiency, and agreed to lift its lien, thus mooting
> the action," Judge Rakoff wrote.
>
> Prevailing Party
>
> After recounting the facts, Judge Rakoff found the estate entitled to $34,172.19 in fees and costs because it
> satisfied all of the necessary prerequisites for such an award.
>
> Preliminarily, Judge Rakoff found the court had jurisdiction over the tax dispute largely because it was a
> procedural claim about the IRS's failure to properly notify the estate of the alleged tax deficiency.
>
> Then he found the estate a suitable "prevailing party" entitled to fees because, among other things, its net
> worth did not exceed a $2 million statutory cutoff and the estate prevailed on its claim.
>
> Judge Rakoff rejected in strong terms government arguments that the estate did not win its primary battle,
> which was over the issue of notice, and that the estate deserves no fees because the government position was
> "substantially justified."
>
> "Here the fact that the IRS, having ignored plaintiff's repeated communications for more than four years,
> completely accepted plaintiff's position across-the-board within a few months of the filing of this action, makes it
> abundantly clear that no prior diligent investigation of this matter was conducted by the defendant," he wrote.
>
> Noting that the IRS promises taxpayers its goal is "to protect your rights so that you will have the highest
> confidence in the integrity, efficiency and fairness of our tax system," Judge Rakoff wrote, "Our goal at the federal
> courts is (among other things) to help the IRS keep its word."
>
> He added, "A modest award of costs and attorneys' fees to the prevailing plaintiff in this case may encourage
> such confidence."
>
> The estate was represented by Paul P. Rao Jr., Judge Rao's son. Aaron M. Katz, a Southern District Assistant
> U.S. Attorney, represented the government.
>
>
>
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