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"Just because the client is lying to you, doesn't mean that you can't figure things out on your own, and it doesn't mean that you cannot effectively represent the client; it just takes more work."
MIAMI, February 17, 2009 -- With the US Government stepping up its fight against offshore tax evasion, one of the country's leading tax defense attorneys says the keys to a successful defense against a tax investigation are something that is anathema to many defendants – honesty and openness.
US taxpayers being investigated by the IRS would be well-advised to heed the advice of Edward M. Robbins, Jr., of Hochman, Salkin, Rettig, Toscher & Perez, in Beverly Hills, California. Last year, Robbins successfully negotiated what is considered to be one of the sweetest tax-deals ever.
As a result, his client, former UBS customer Oleg Olenicoff, received a non-custodial sentence despite being accused of evading $7.2 million in taxes by concealing $200 million of assets in offshore accounts. Instead of prison, Olenicoff, a billionaire property developer, was sentenced to two years of probation, a fine of $3,500, and 120 hours of community service after pleading guilty to a lesser charge of willfully filing a false tax return for the tax year 2002. A key part of the deal was that he co-operate with a wider IRS investigation into suspected tax evasion by approximately 20,000 UBS clients.
Robbins said that, in order to be effective, attorneys defending taxpayers against criminal tax evasion charges must handle such defenses differently to other types of criminal actions.
"I suppose that we have all heard the proposition from some criminal defense attorneys that they really don't need to know true facts of their case, that they can mount a proper defense without knowing," he told OffshoreAlert. "Whatever merit this approach might have in a murder or child molestation case, it has no merit whatsoever in a criminal tax case.
"The subjective nature of criminal tax cases allows for a good deal of maneuvering by the client and the lawyer, all done with a view toward bringing the client in for a soft landing in the face of an ongoing or potential criminal tax investigation. Without knowing the details of the case, the uninformed lawyer is limited in his maneuvering room or worse, is likely to make a move that hurts the client's chances for that soft landing.
"The criminal tax defense attorney needs to know everything about his case before he or she can make critical decisions involving:
- How much information to share with the government;
- Whether or not to file amended and/or current returns, fifth-amendment returns, or no returns at all;
- Whether or not to have the client make other required filings, such as FBARs;
- Whether or not to fight summonses or grand jury subpoenas;
- Whether or not to allow the client to talk to the government;
- Whether or not to request a "queen for a day" letter or and immunity order for the client;
- Whether or not to allow the client to exercise control over certain funds or other property under the client's control; and
- Whether or not to allow the client to proceed with parallel civil tax matters or other overlapping civil matters.
"I am sure that my colleagues in the criminal tax bar can add to this list, but the point remains the same. Complete mastery of the facts of the case is essential for proper representation.
"Unfortunately, this goal is often hampered by the unwillingness of some clients to be candid with their lawyer. These types of clients apparently have spent their lives lying to everybody, including the government, and they see no reason to modify that behavior for their lawyers. If the lawyer cannot penetrate the client's unwillingness to be candid, the lawyer will be forced to conduct his own investigation to get to the bottom of the case, and not rely on the client. Just because the client is lying to you, doesn't mean that you can't figure things out on your own, and it doesn't mean that you cannot effectively represent the client; it just takes more work."
Robbins (pictured left) will be expanding on his strategies for a successful tax defense at the 7th Annual OffshoreAlert Financial Due Diligence Conference in April, when he will co-present a session entitled: "How to Defend Yourself Against an IRS Administrative and Criminal Investigation".
His co-presenter will be Robert G. Bernhoft (pictured right), of The Bernhoft Law Firm, whose tax clients have included actor Wesley Snipes and 'Girls Gone Wild' video producer Joe Francis. Among the issues they will look at are those specifically related to offshore tax evasion.
Attend this and 26 other unique sessions presented by industry experts from the world's top organizations at the 7th Annual OffshoreAlert Financial Due Diligence Conference, where new practitioners and experienced professionals will find opportunities to enhance their knowledge, expand capabilities and learn new skills.
