Nooo?? You Think So, Scofflaw?

American Scofflaw

Princeton, N.J., tax lawyer Robert Kenny says he's paying a steep price for taking on the IRS on behalf of clients: a retaliatory strike that has put his livelihood and his law license at risk.

In a federal court suit, Kenny alleges that when he complained to the Treasury Inspector General for Tax Administration that an IRS agent was telling taxpayers to forgo representation, the IRS lodged a professional complaint against him.

Though the suit ... was dismissed, Kenny says he is appealing. According to his suit, Kenny filed three complaints with TIGTA over a three-year period, accusing IRS agent Steven Wald of deterring taxpayers from hiring representatives and, when they did so, trying to interfere with them. ...

[A]n IRS investigation of Kenny's tax records ... uncovered two late-filed returns, for 2001 and 2005 ... Kenny, who is also a CPA, says his failure to obtain an extension was careless but when he realized his error, he filed accurate returns and paid what he owed, well before the IRS began its probe. ...

Last May 14, however, he heard from the IRS Office of Professional Responsibility ... [which] accused him of willful failure to file a return, as well as giving false information and attempting to influence an IRS employee by making false accusations. If the charges stick, Kenny can be permanently barred from IRS practice, suspended, censured or fined. In addition, some states will disbar a lawyer whose right to practice before the IRS is revoked, and New Jersey might be one of them, says Kenny.

Last July, after he learned of the OPR action, Kenny filed another complaint with TIGTA, asserting that he had been falsely accused in retaliation for his complaints against Wald. He says he does not know the status of that complaint or of the pending OPR matter. The following month, he sued. ...

He issued a press release when he filed his complaint, raised it on an ABA listserv and spoke with lawyers knowledgeable about that area of the law. One of them is Kevin Thorn, of Williams Mullen in Washington, D.C., who once worked for the OPR and devotes a large part of his practice to representing lawyers and accountants in OPR proceedings.

"Tax practitioners should sit up and take notice of this," he says. There seems to be a connection between Kenny's filing of a TIGTA complaint and the OPR complaint against him, says Thorn ...

New Jersey tax lawyer Dennis Haase [says] ... "I have had clients come to me and say the IRS told them 'you don't need someone to represent you, you only need to produce the records,'" says Haase, of Sweeney Lev in Montclair. "We find it chilling. We find it scary," says Barton Goodeve, an accountant in Peterborough, N.H. ...