On September 17, the U.S. Tax Court, in Dynamo Holdings LP v. Commissioner, 143 T.C. No. 9 (Sept. 17, 2014), held that a taxpayer could use predictive coding, over the objection of the Internal Revenue Service (IRS), to identify relevant electronically stored information (ESI) for production. This is the first Tax Court case to address the use of predictive coding in response to a discovery request.
Americans are obsessed with taxes.
Maybe it’s our libertarian streak. Maybe an anti-tax bias is in our DNA from the Boston Tea Party. In any event, no real American likes paying taxes.
And some people don’t like paying them even more than the rest of us. Like Donna Marie Kozak.
In Omaha Nebraska this week, Kozak was convicted of a number of tax crimes. She is a member of the “sovereign citizen group ‘Republic for the united States of America.’”
According to DOJ’s press release about the case,
since the late 1990s, Kozak has engaged in a long series of fraudulent schemes to obstruct the internal revenue laws. These included placing her property in sham trusts, establishing a sham charitable foundation, sending harassing correspondence to IRS employees and filing bogus tax returns, trust returns, private-foundation returns and other false documents with the IRS. In 2008, she filed a tax return based on fictitious income and tax withholdings on Form 1099-OID statements that claimed a refund of $660,000.
At trial, in addition to the questionable tax filings, she also seems to have filed a $19 million tax lien against a federal judge who oversaw the tax fraud prosecution against two of her friends. She also filed other multi-million dollar tax liens against the federal prosecutors who brought her friends’ case.
It seems Kozak did not have a legitimate claim to $19 million from that judge. And self-help to a fake tax lien is not how one should address a suspicion of prosecutorial overreach.
Like the folks who believe that the limits on maritime jurisdiction, explained by a talking salamander, holds the key to beating a federal criminal charge, the full tapestry of wacko tax fraud theories is a lovely thing to behold….
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* Judge Emmet Sullivan (D.D.C.) wants the IRS to explain, in a sworn declaration, how exactly it lost Lois Lerner’s emails. [WSJ Law Blog]
* Speaker John Boehner wants to take the Republicans’ crusade against Obamacare to the courts. [New York Times]
* “Duke University is not and never has been in the business of producing, marketing, distributing, or selling alcohol.” Some bros down in Durham disagree. [ABA Journal]
* If you see something… sue someone? The ACLU and Asian American civil rights groups, together with some help from Bingham McCutchen, have filed a legal challenge to the Suspicious Activity Reporting database. [New York Times]
* Congrats to David Hashmall, the incoming chair of Goodwin Procter — and congrats to outgoing chair Regina Pisa, the first woman ever to lead an Am Law 100 firm, on her long and successful leadership. [American Lawyer]
* A group of investors might end up devouring Crumbs, the cupcake-store chain founded by New York Law School grad Mia Bauer that suddenly shut down this week amid talk of a bankruptcy filing. [Wall Street Journal (sub. req.)]
With the Supreme Court’s 2013 term concluding on Monday, many Americans are assessing how they feel about the judicial branch of their government. Even if you are still reeling about some of the decisions made recently by the least dangerous branch, don’t forget the executive. The president and his agencies can also make you wonder how the American experiment is panning out.
On Tuesday, U.S. District Judge Reggie Walton issued an order to hear oral arguments from lawyers representing the Internal Revenue Service and the conservative nonprofit True the Vote. True the Vote is one of the conservative groups claiming IRS improperly targeted its application for nonprofit status based on the group’s political and philosophical affiliation. True the Vote filed a motion for a preliminary injunction and expedited discovery on Monday, calling for an independent forensics examination of any IRS hard drives, servers, or other computer hardware involved in the government agency’s possible targeting of conservative nonprofits’ applications for tax-exempt status. It wants an outside computer expert to try to ascertain how and when any electronic evidence, such as former IRS Commissioner Lois Lerner’s emails, may have been lost. Also, it would be great if the government didn’t spoliate — I mean “recycle” — any more evidence….
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* With the impossible body ideal of Barbie gracing the Sports Illustrated Swimsuit Cover, perhaps we should consider the positives that Barbie has contributed to women over the years. Missing is the rare, vacuous “math class is tough” Barbie. [The Careerist]
* A five-year-old writes the cutest response to the IRS. [TaxProf Blog]
* Professor busted for taking upskirt pics. His defense? How else was he going to prove the girls weren’t wearing underwear? Touché. Touché. [The Smoking Gun]
* The reasons to quit your Biglaw job. Now in listicle form! [Buzzfeed]
* The Supreme Court has a chance to take a stand against prosecutorial misconduct. Will they take it? [The Atlantic]
* If you’re violating your probation, be sure to videotape it and post it on YouTube. There’s no way your probation officer will see it. [IT-Lex]
* On April 11-12, 2014, the Marquette University Law School will hold a symposium entitled “Judicial Assistants or Junior Judges: the Hiring, Utilization and Influence of Law Clerks.” Our own David Lat will be there, along with such luminaries as Judge Posner, Judge Sykes, Joan Biskupic, and Tony Mauro. [Marquette University Law School]
Last month, we reported on the mounting evidence that NYU, both the university as a whole and the law school specifically, employed a number of charitable organizations to provide faculty and staff with what can be safely called sweetheart deals on real estate and loans.
The investigation is a little unfortunate, given that it arises from a political witch hunt directed by Senator Chuck Grassley against Treasury Secretary Jack Lew. But a Senate investigation is a Senate investigation and NYU needs to suck it up and comply.
But, according to Grassley, NYU has ever so politely given him the finger…
* Oh, and by the way, it’s not just Verizon that the NSA is spying on. It’s every major phone and internet provider, too. They must see an amazing amount of foreign pornography on video chat. [Guardian]
* The IRS is under siege over its conservative targeting scandal, and now a training video parodying Mad Men has surfaced with a focus on “customer service.” How incredibly ironic. [DealBook / New York Times]
* Francine Griesing, the woman who sued Greenberg Traurig for $200M over the firm’s so-called “boys’ club” (and later quietly settled), has tips for women who want to succeed in the law. [Am Law Daily]
* This ruling has to do with collecting fees following a law school clinic victory, but the key takeaway is that law students’ “time and effort still has monetary value.” Hear that, ABA? [National Law Journal]
* Rutgers Law-Camden is trying to recover from “an existential threat” after its class size unexpectedly dropped by more than 50 percent. But… that’s a good thing these days. [Philadelphia Business Journal]
* A judge dismissed Pennsylvania Governor Tom Corbett’s lawsuit against the NCAA for “fail[ing] to advance the ball.” How kind of her to entertain us with some football references. [Legal Intelligencer]
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* Let’s get ready to rumble! Some of the Supreme Court’s most controversial opinions yet are expected to be rolled out in the coming weeks — and maybe even today. Stay tuned for news. [CNN]
* Let’s see what happens when Obama nominates three judges at once to the D.C. Circuit. How many of them will be confirmed as quickly as Sri Srinivasan? Probably not many. [New York Times]
* “I don’t know whether the Lord Himself could get confirmed at this point.” It looks like poor Attorney General Eric Holder doesn’t have very many people left to turn to thanks to executive and congressional inaction. [Bloomberg]
* When it comes to recent diversity efforts in Biglaw there’s an ebb, but not really a flow, and it’s all being blamed on the recession. Also, “diversity fatigue” is apparently a thing now. [New York Times]
* The $200 million gender discrimination suit filed against Greenberg Traurig over the firm’s alleged “old boys club” has been settled for an undisclosed amount. You go girl! [Thomson Reuters News & Insight]
* According to Judge Murray Snow, Arizona’s most beloved sheriff, Joe Arpaio, has been violating the constitutional rights of all of the Latinos whom he supposedly “hadn’t” been racially profiling. [Reuters]
* My, how things change: David Blankenhorn, a man who once testified as an expert witness in support of Proposition 8 at trial, has come forward to condemn anti-marriage equality laws. [Los Angeles Times]
* Stewart Schwab, the dean of Cornell Law School, will step down in June 2014. Perhaps the next dean will crack down on the number of cam girls pleasuring themselves in the law library. [Cornell Chronicle]
* Law schools tend to be “bastions of liberalism,” which makes it hard for students to find intellectual diversity. It’s a good thing we’ve got the Federalist Society to balance things out. [Washington Times]
* People who think Washington needs another law school propose one for students “who can’t afford to … go into debt … to get their legal degree.” This won’t sit well with the legal academy. [News Tribune]
* With Lindsay Lohan stuck in rehab, Amanda Bynes decided it was her turn to go wild. The retired actress says she’s suing the NYPD for unlawful arrest and sexual harassment. [New York Daily News]
* Alton Lemon, the Supreme Court plaintiff behind the eponymous Lemon test, RIP. [New York Times]
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* “Journalists should not be at legal risk for doing their jobs.” Thanks Obama, but AG Eric Holder was the one who kind of signed off on the James Rosen search warrant. [Open Channel / NBC News]
* The chief judge of the D.C. Circuit apologized for a lack of transparency in the James Rosen probe, and this is one of the least embarrassing things that happened this week. [Washington Post]
* Despite having “done nothing wrong,” embattled tax official Lois Lerner announced she’s been placed on administrative leave in light of recent events. I salute you, fellow WNE grad. [National Review]
* Watch out, patent trolls, because this proposed bill might actually be — gasp! — helpful. If enacted, the Patent Abuse Reduction Act’s goal is to help keep discovery costs down. [Hillicon Valley / The Hill]
* It’s a hell of a drug: for some lawyers, the sequester won’t be such a bad thing after all, because Coast Guard and Navy forces won’t be available to intercept 38 tons of cocaine. [Breaking Defense]
* Proskauer Rose’s ex-CFO, Elly Rosenthal, has cut down her $10 million suit against the firm to just one allegation. She claims the firm fired her solely for her diagnosis of breast cancer. [Am Law Daily]
* A third perpetrator emerged in the Berkeley bird beheading case, and he was just sentenced to two days in jail. Can you listen to BARBRI in a jail cell? I guess Hazhir Kargaran will find out. [San Francisco Chronicle]
* The Boy Scouts of America will now admit openly gay youths into their ranks for the first time in the history of ever. You should probably “be prepared” for a flurry of litigation over this. [New York Times]
* A mistrial was declared in the penalty phase of the Jodi Arias murder trial. Ugh, come on with this, the Lifetime movie is already in post-production! How on earth are they going to work this in? [CNN]