 August 2002 Vol. 11, Issue 3
An IRS Background
Comes In Handy – Tax Attorney Helps Families Caught In Scam To Whittle
Down Back Taxes Reprinted by permission of Crain’s Cleveland Business (Vol. 23, No. 22@ 2002) June3-9 by Crain’s Communication, Inc. All Rights Reserved. Internal Revenue Service. Audit. Tax penalties. Those words have the power to make even the most stoic businessperson cringe. And cringe you might, if you were in Terry Vincent’s
clients’ shoes just a few months ago. A former IRS lawyer turned Buckingham,
Doolittle & Burroughs, LLP tax attorney, Mr. Vincent is representing four
But those clients now have reason to celebrate. Mr. Vincent, using his IRS background and knowledge of the tax code and legal system, has made those back taxes and penalties diminish considerably. Rather than owing a collective fortune to the IRS, he has reduced the families’ back taxes to about $217, 000 and negotiated down tax penalties to a paltry $18,000. Magic? Not really. Mr. Vincent says he’s no magician, just a good lawyer with the right background for this sort of case. He joined the IRS after receiving his
law and master’s degrees from the “I understand where the case began and how it got to where it is,” Mr. Vincent said, explaining how he approaches cases involving the IRS. “I know a lot of the people (at the IRS) and how they worked a case, who will handle litigation and the good settlement avenues.” This particular
case began in Doylestown, a small town in rural “But most of the money went into thin air,” Mr. Vincent said. “About $80 million gone.” He said most of the money was never invested at
all, and the first investors received payments that came from new investors’ money,
rather than stock market gains. The fund collapsed and was shut by the Securities
and Exchange Commission in 1999. No criminal charges have been filed in the case,
but on Most of the Cyprus Fund investors also were encouraged to put all their personal assets in offshore trusts, ostensibly to minimize tax implications, Mr. Vincent said. In fact, many people were convinced they owed no taxes – not only on their investments but also on their personal income, he said. “They and their trusts received notices of deficiency (from the IRS) in 2000.” Mr. Vincent said. The IRS said the families owed $4.6 million in unpaid taxes, plus $1.1 million in penalties. A representative for the IRS did not return three telephone calls seeking comment about this case. The problem was, the IRS had double-, triple- and even quadruple-taxed the families in some of their income and investments, because the families were encouraged by their trust advisers not to provide certain financial background information to the IRS, Mr. Vincent said. But by reconstructing the path the money took in and out of the trusts and the Cyprus Fund and by working with IRS agents, appeals officers and district counsel, Mr. Vincent negotiated the four families’ taxes and penalties down to more manageable levels. But other investors never bothered to negotiate with the IRS and eventually will pay the price, he said. “The biggest sin of this whole thing is there are people who never contested these tax dollars and now they’re going to owe all of those taxes,” he said. “ The service (IRS) knows they don’t owe all those taxes. The service tried to convince them to come into the fold, and they steadfastly resisted, and they’re losing their homes, all of their assets.” Mr. Vincent’s work on the case isn’t done either. He’s still arguing on behalf of his clients, trying to have their investment losses in the Cyprus Fund written off of their taxes from 1996 to 1999. That essentially would erase the remaining $235,000 they owe the IRS. Buckingham, Doolittle managing partner Jerry Chattman says he’s quite impressed with the work Mr. Vincent has done for the firm and its clients. “He understands how the IRS functions, their strengths,” Mr. Chattman said. “He has a depth of knowledge you can’t get from books, that you can only get from experience.” Terry Vincent is a Shareholder and member of the Business Law Practice Group. He can be contacted at tvincent@bdblaw.com or 216.615.7326. Estate Planning
Is For Everyone What do plants, “Topsy” and estates have in common? Usually, before you even realize it, your estate has “grown.” When this happens without involvement on your part, except for maybe a little nurturing and watering along the way, your estate may become so unwieldy and hard to manage that only drastic measures can make it fit into your plans for your own and your family’s future. All this is a way of saying that estate planning is important. Not just when there is a real expectation of dying, but through all of the stages of your life. You owe it to yourself and your family to take a financial physical now, and to repeat it every few years. You should formulate goals or plans, take stock of your assets and liabilities, consider the future both short-range and long-range, and determine how to provide for yourself and your family during your life and after your death. This is the process of estate planning. It is not a static process, since circumstances change, as do people. Your estate requires a continuous updating of thoughts. Translating your thoughts into actions requires well-thought-out instruments such as wills, possible trusts, interfamily transfers, etc. In all this you should consider the impact of taxes – income, gift, estate, and generation-skipping. Complicating these thoughts and actions is the ever-changing nature of the tax laws. However, taxes should be a secondary consideration. Of primary importance is accomplishing what you wish to do to benefit your loved ones. The competent estate planning expert will assist the client in following through with his or her desires at the least tax cost. Such devices as lifetime gifts to family, charitable bequests both during life and at death, use of the marital deduction, and proper beneficiary designations of life insurance, can supplement the provisions of wills and trusts to produce an effective estate plan. There are two inevitable things in life – death and taxes. Estate planning is the means to ensure that one doesn’t cause the other. And along the way there are many risks. You can guard against, or at least alleviate, some of these risks by life or health or disability insurance but other bumps in life’s road may come without forewarning. Forethought is important, therefore, to protect yourself and your family. Since the rest of your life will be spent in the future, the sooner you come to grips with the present and plan for the future, the better your future will be. Failure to plan could lead you one day to wake up, or (what is worse) not wake up, to find that your estate has just “grown” without the pruning and planning which could have made your life more beautiful. Estate planning is for everyone. George Weinstein is an Of Counsel Attorney and member of the Trust & Estates and Business Law Practice Groups. He can be contacted at gweinstein@bdblaw.com or 561.995.2981.
On On
August 8, 2002 and August 15, 2002 , Frederick
M. Lombardi, (Buckingham AkronSM), Alan
DiGirolamo, Robert A. Hager, and
John P. Slagter (Buckingham ClevelandSM)
will be presenters at “Using Ohio Construction Laws To Your Advantage” sponsored
by Lorman Education Services. They will present on “Legal Aspects of Construction
Contracts and On On Buckingham, Doolittle & Burroughs’ Health Law Practice Group will be holding the following seminars: To register
on line visit www.bdblaw.com/seminars.asp
or contact Buckingham’s Employment Law Practice Group 14th Annual Seminar will be held as follows: To
register on line visit www.bdblaw.com/seminars.asp
or contact Thomas W. Hess
and Joel H. Mirman (Buckingham ColumbusSM)
will be presenting a series of seminars sponsored by the Association of Ohio
Philanthropic Homes, Housing and Services for the Aging. Their topic will be
“Nursing Home Malpractice in Please reference www.nbi-sems.com for additional information and registration. On
On On On Out and About – Recent Presentations: Business Law Practice Group Ralph D. Amiet
(Buckingham AkronSM) gave a presentation about his trip to Robert W. Malone (Buckingham AkronSM) presented on “LLCs – Advising Small Business Start-Ups and Larger Companies” Employment Law Practice Group Gerald B. Chattman (Buckingham ClevelandSM) spoke at The Sensitivity Training Seminar sponsored by Old Republic Title. Also, he presented “Confidentiality: An Overall Viewpoint” as part of a series for the Western Reserve Area Agency on Aging. Ashley M. Manfull and Vincent J. Tersigni (Buckingham AkronSM) spoke at the Society for Human Resource Management in July. Their topic was “Who Wants to be an FMLA Millionaire?” Tod T. Morrow (Buckingham CantonSM) presented “OSHA Compliance for Nursing Homes” at the Ohio Health Care Association Annual Convention. Health Law Practice Group Donald A. Antrim (Buckingham ColumbusSM) and Joseph J. Feltes (Buckingham CantonSM) in July spoke on “Corporate Compliance in Health Care.” Thomas W. Hess (Buckingham ColumbusSM) presented “Risk Management in Nursing Home” for Autumn Enterprises. Jeffrey T. Royer (Buckingham ClevelandSM) presented at a series of Confidentiality Training Seminars on “Confidentiality and HIPAA” in July for the Western Reserve Area Agency on Aging. Litigation Practice Group Douglas
Paul (Buckingham ClevelandSM) presented on “Confidentiality:
A State Prospective” as part of a series of Confidentiality Training Seminars
for the Western Reserve Area Agency on Aging, in July. In addition, he was a presenter
at the National Business Institute Continuing Legal Education Seminar titled “Powerful
Legal Negotiation in Medical Malpractice Defense Practice Group Mark
D. Frasure and Christopher
S. Humphrey (Buckingham CantonSM) gave presentations on “Medical
Record Documentation and Informed Consent” at Grand Rounds at Real Estate & Construction Law Practice Group Donald
B. Leach, Jr. (Buckingham ColumbusSM) presented “ Trusts & Estates Law Practice Group George Weinstein (Buckingham Boca RatonSM) appeared on “Wealth & Wisdom with Joyce Boyer & Michael Lee.” The show’s topic was “Insight into Preserving and Growing Your Assets.” Worker’s Compensation Practice Group Richard
A. Hernandez (Buckingham ColumbusSM) spoke on “Medicare-Set
Aside Controversy” at Roadway Express’ National Safety Conference in
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