Common Taxpayer Mistakes

The following was published in the March 2014 Dade County Bar Bulletin

 “State Bars have frequently found that a lawyer’s failure to remit employment taxes

constitutes a violation of professional rules of ethics.”  Karen Lapekas, JD, LLM

A lawyer is only as good as his word, and his license to practice law is only as good as his trust accounting. Month after month the last pages of the Florida Bar News are full of stories of lawyers being suspended or disbarred from practicing law for failing to account for or diverting client trust funds. The stories are consistent reminders of the dire importance of holding inviolate a client’s funds. Not so frequent, however, are the reminders of the trust account many lawyers must maintain for someone who is not their client: the IRS. Read the rest of this entry »

The story of Pinocchio is lost to many people. A fairy could tap someone on the shoulder and warn him that “a lie will keep growing and growing, until it’s a plain as the nose on your face,” and that person will then literally (literally, at least for poor Pinocchio) make a jackass of himself on his way home! And his only reprieve from an extended sentence? Good behavior!

As a trial attorney for the IRS, I saw a surprising number of instances in which taxpayers weaved inventive stories and even went to great lengths to create documents to support their tall, and in the case of substantiating claimed deductions, expensive, tales. You might ask, what’s so surprising about people trying to deceive the IRS? Answer: What is surprising is that people fail to appreciate the power of the truth, (or in many cases, silence) when time and again lies exacerbate problems or even create new ones. Read the rest of this entry »