Sodipo v. IRS, T.C. Memo 2015-31 (Jan. 5, 2015).
On Monday the Tax Court published a case in which the pro se litigant succeeded in convincing the judge that he was a completely unreliable witness when testifying about his own case: "We found Mr. Sodipo's testimony to be in certain material respects general, conclusory, vague, uncorroborated, self-serving, and/or not credible. We shall not rely on the testimony of Mr. Sodipo to establish his position with respect to each of the issues that remain for decision." Id. at p. 11. To make matters worse, the Court found the opposite to be true with respect to the IRS's agent: "We found the testimony of the revenue agent to be trustworthy. We shall rely on that testimony as we deem appropriate." Note, Mr. Sodipo was representing himself, so there was absolutely no one on his side of the case that the Court would believe. This is never a reaction from a Tax Court judge (or any judge for that matter) one hopes to evoke.
Cf. Mottahedeh v. IRS, T.C. Memo. 2014-258 (Dec. 29, 2014).
Yesterday’s Mottahedeh v. IRS, T.C. Memo. 2014-258 (Dec. 29, 2014) perfectly demonstrates the importance of finding a competent, ethical legal advisor. There, the litigants earned a decent living by selling questionable tax planning and reporting advice. That is, they advised dealing in cash, avoiding the paper trail, and refusing to deal with the IRS and California tax authorities. They even offered courses and packages through their “Freedom Law School” in which they taught such strategies.
This factual scenario (in which incompetent tax advisors are facing IRS scrutiny and losing before the Tax Court with their own advice) is actually rather common in Tax Court cases. They illustrate the importance of finding a competent, qualified, and ethical advisor to assist with a taxpayer’s planning and reporting needs. Common indicators include patience, extensive training, a license to practice, and (more than anything else) common sense. No degree certificate or badge of recognition can guarantee such quality, which is why good help is so hard to find. But be sure that if your tax professional’s advice sounds too good to be true, it probably is.
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