Sheldon Jones was worth $500 Million. He invested heavily in real estate and worked hard making sure he got rent from every property sufficient to cover his debt loan and other expenses. It was hard work, but it paid off. He was sixty-five years old and in great shape. His blood pressure was low, his heart and lungs were clear. His doctor told him that he could live to be 100. He still had rugged good looks that came from living in the climate of Washington State. Seattle was his home. He was about 5’10” tall with gray and brown hair, brown eyes and a pale complexion.

Now it was the year 2010 and the Tax laws did not permit him to give that wealth to his kids without a huge tax. But if he died, well that would be another story. He had to come up with a plan. His kids were everything to him. His son, Phillipe and his daughter Christine were his pride and joy. He tried to make all of their events as they were growing up, and now that they were grown and had families of their own, he was despondent.

August 15, 2010.

“Dad, you seem down”, Christine asked at a family picnic. “Well, you know I’m not getting any younger. I could die any day. Will you miss me?” She smiled, “You know I will, Daddy.” He started to tear and choke up and looked away, then hugged her.

Christine was 30 years old and was the spitting image of her mother. Lean shapely and not looking any worse from having several kids. She was very attractive. She was happily married with four children. Phillipe was 27 years old, and a bit of a hippy. Long hair, a beard, handsome good looks, and a happy bachelor who seemed to have a new buxom babe every time Jones saw him. He told his dad, “I’m just spreading the love! And with big chicks there’s more to love.” The kid had a charm about him. No doubt about that.

September 30, 2010.

A portly man with a bad Spanish accent and looking like a derelict appeared at the Panamanian National Bank in Panama City. He wanted to open a savings account for $1,000. The bank clerk asked for identification and he handed over a paper drivers license showing his name of Lupe Cordero with a Panama City address. He was about 5’10” with brown hair and brown eyes. He was dirty as though he had waded through mud.

The Tax Court ruled in favor of the Frome family and to add insult to injury found the Government had not even a justiciable claim and levied a sanction of $100,000 upon the Government.

January 15, 2012.
Laura Holden and Brian had been dating for several months now. As they walked hand in hand out of the local Outback restaurant, Laura smiled a wan smile, “Brian, I hope that the Frome case won’t hurt your career. I’m sorry that forensics just haven’t quite caught up yet.” Brian smiled and bright smile, “No you didn’t hurt my career. We pursued the truth and it didn’t turn out. It was either a brilliant plan, perfectly executed, by ruthless people, or he really died on January 1, 2010, either way I’m not losing any sleep over it.”

January 15, 2012
Marilyn looked out at the Carribean. It was blue/green shimmering in the sunlight. Miquel, her latest boy toy, brought her a cold rum drink. She raised her glass to the sky and said, “thanks Dad”.

May 15, 2012
Daniel Frome was yelling into the telephone at some poor underling when he died of an instant heart attack at his desk. Due to the fact that the Frome Family Business had been put into a Dynasty Trust, Marilyn got the income from the other half of the estate as well for the rest of her life and the family business was soon merged with a large multinational company to provide her with the liquidity that she desired for her life.

This ends the first tale, we welcome your comments and suggestions. The next Tale starts tomorrow about a person who needed to die in 2010, but was too healthy to expect such a thing to natuarally occur.

January 21, 2012

The case went to the United State Tax Court. Brooks Jones, the Assistant to the District Counsel, was assigned to represent the IRS. Jones was a 20 year veteran and had tried nearly a hundred Tax Court cases. His aggressive demeanor and Bronx accent was well known in the Halls of the Court. Roger Jamison represented the family. Jamison was known as brilliant and ruthless. He had was probably the best Tax litigator in the Country and needless to say, the Family could afford the best. Each of the witnesses was paraded in front of the Court. On each one, Brooks Jones, asked them if they saw his entire face. The problem was the witnesses described long relationships with the decedent, and testified as to their knowledge of his gait and his normal appearance. In each case Brooks could not shake their stories. The children testified their story about how their father trekked out on New Year’s Day. Brooks tried tricking them by asking them about December 23 hoping to mess them up, but their stories held. He asked them why they let the old man go out unaccompanied. Marilyn sobbed uncontrollably as if on cue. Daniel choked up when asked the question. Esmerelda testified about the Christmas Day telephone conversation. Brooks asked if it could have been a recording. Esmerelda said, she was no expert, but it was his voice and his words and then she cried about what a nice man he was. Laura testified as the medical examiner that she could not affix a date of death with absolute certainty, but put August 9 on the death certificate as that was the date the body was found and is required by Virginia law, and was the official date of death. She further testified that DNA results confirmed that it was Sidney Frome’s body. Jones cross-examination went into details of the frostbite. But Laura couldn’t lie and told him that there was no way to determine if the frostbite was December frostbite, freezer frostbite, or dead in the snow frostbite. No matter how you slice it, it was not inconsistent with his dying during the snow storm and having his body encased in snow for a couple of weeks. Jamison did not delve into her personal relationship with the Auditor -saving that for another case, another day. The Service called no witnesses.

Six weeks after trial the Service filed its brief with hundreds of citations to cases in which the opinion of the Service was deemed correct because of the presumption of correctness. The law generally gives the IRS a presumption of correctness in its legal findings. The brief further stated that the Court was not bound by Virginia law as to the date of death. That again was merely a presumption and the Court could find differently if the facts supported it. The taxpayer responded that the presumption only applied to legal analysis and not factual findings and that the fact findings rested with the Court and the Service produced nothing that was inconsistent with the date of death believed by the family and the presumptive legal date of death in Virginia. They further argued that the fact that the Service did not put on any witnesses showed this case was brought in bad faith without any scintilla of evidence, merely somebody’s greed.

May 22, 2011
Smith met the next day with Daniel and Marilyn. “Okay here’s the deal. We can settle now for about $5 Billion in estate taxes and interest or we can fight this, or we can counter-offer.” Daniel thought about it and asked, “If we don’t settle what are our chances in Court?” Smith thought for a second, “Pretty good, I think. The legal bills will total $200-300,000, which are deductible. The facts are better for us than for them, but they have the presumption of correctness, but the problem for them is that under Virginia law, your father is presumed to have died on August 9, 2010. They’re going to have a tough time with that one.” Daniel ran the numbers in his head, “Let’s offer them $100 Million and see how big their balls are”, smiling as he said the words. “That’s a whole lot of money to walk away from. I mean that equals some Congressman’s entire career’s worth of pork.”

Smith called the Jackson on the telephone. “Mr. Jackson, I’m going to fax you a letter, but I wanted to let you know our thoughts. I talked it over with the family and we do not believe we owe you a dime. However, there is always some small risk in litigation, no matter how ridiculous and we consider this to be legalized extortion. That said, we’ll offer you $100 Million total (including interest), you waive all penalties.”

Jackson called the Head of Appeals, the District Director and District Counsel and Congressman Witherspoon, this was a conference call that required everyone’s input including a member of Congress who served on the Joint Committee on Taxation. “Okay, we have an offer of $100 Million from Mr. Frome’s family. Our demand was $9 Billion. Our offer to settle was about $5 Billion. They have a pretty strong circumstantial case. They have the state law presumption that the date of death is the date the body is found. They have numerous witnesses who thought they saw the decedent on January 1, 2010. They have the children’s testimony that he went outside. They have the maid’s testimony that she talked to the Decedent on December 25, 2009. They have post mortem frostbite which tends to confirm their story, not ours. All we have is that no one can positively say that they saw his entire face, but they did think they saw him.” The District Counsel frowned. “Boy, we’d be out on a limb on this one. No doubt about it, their case is better than ours. What do you think?”, he asked the District Director. The District Director thought for a minute. “I think this is a big enough case that we need to hear what the Commissioner has to say. They’ve offered us a ton of money which we all know is a test of our will. On the other hand, their case is much better than ours and we’ll go into Court pretty much buck naked. The question is, Is this the test case we ought to litigate?”

After being briefed in great detail, Mort Copeland, the Commissioner of the Internal Revenue Service responded, “Let’s litigate it. I really don’t want to leave $9 Billion on the table and while you’re at it, add in the fraud penalties. I mean, either they faked this whole scenario, or they didn’t. If the Court finds that they made all this up, they’re liable for fraud penalties. That means the tax rises to their entire net worth. Let’s see if they’re willing to see this bluff through, although if they offer one Billion or more, let’s talk again.”