Two attorneys who worked for the Internal Revenue Service have been disbarred after they defrauded the courts so the agency could win 1300 tax shelter cases according to the New York Times.
The Court of Appeals for the 9th Circuit concluded that the lawyers defaruded the court by making a corrupt deal with airline pilots who bought tax shelters in the 1970’s and 1980’s. The arrangement included an agreement that no tax collection action would be taken against the pilots with regard to purchase of the tax shelters in return for their testimony against other people. The court concluded this was “extreme misconduct.”
Arkansas has suspended the license of William A. Sims and W. Kenneth McWade was suspended by the Oregon Supreme Court.
The two attorneys initially received bonus awards for their work on the cases. But a Houston attorney represening 124 of the tax shelter buyers filed complaints on behalf of the purchasers of tax shelters. One of the buyers is seeking a refund of $6 million.
The two attorneys have left the Internal Revenue Service but have appealed their suspensions.