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ASK THE EDD ATTORNEY – IS YOUR TAX REPRESENTATIVE FOR REAL?

By Robert S. Schriebman
October 24, 2016

Introduction

Is your tax representative for real? Is your tax representative truly licensed to practice law, public accounting, or licensed to represent you in a tax dispute with the IRS before the U.S. Tax Court?

I have been practicing tax law for over 40 years. In that time I have handled thousands of tax cases and interviewed countless potential clients. No client or potential client, coming into my office, has ever asked me whether or not I was currently licensed to practice law! I have asked many of my brother and sister lawyers if any client has ever asked them to prove they were licensed before engaging their services. No attorney has ever replied in the affirmative.

Every once in awhile you will read in the paper or over the internet about someone arrested for impersonating an attorney. I can remember, as a young lawyer, that I referred a local charlatan to the State Bar for practicing law without a license. This fellow had an office, and had been getting away with it for years -even in court!

These people can do great harm to the unsuspecting public much in the same manner as a quack doctor can do to a patient.

On October 21, 2016 the U.S. Tax Court published its decision in the Shamrock case holding that an unlicensed attorney handling a tax case could bind his clients to an agreement made in court on their behalf. (Shamrock v. Commissioner (TC Memo 2016-193, Dec. 60, 719(M))

The Shamrock Case

Mr. and Mrs. Shamrock hired the services of an Illinois attorney who was not currently licensed to practice in Illinois. His license was suspended. There are many reasons why an attorney is disbarred or has his or her license suspended. We lawyers are required to not only pay our annual bar dues and to have a certain number of continuing education courses completed before our license can be renewed. The Shamrock's attorney did not pay his bar dues and did not complete or pass the required ethics courses. Nevertheless, the attorney took their case before the U.S. Tax Court.

The attorney was experienced in representing clients before the Tax Court. He made all the required appearances and correctly filed all necessary papers. Prior to an actual Tax Court trial, the Court requires both sides to agree upon certain facts and issues in advance so that the trial can be more efficient. This process is known as "Stipulation." The attorney negotiated a stipulated decision of key issues and submitted it to the Court for approval.

In the stipulation process, prior to trial, the Shamrock's attorney stipulated to certain facts regarding loses from real property. The Shamrock's disagreed with the stipulation and wanted it rescinded because they were represented by an unlicensed lawyer. They asked the Court to overturn the stipulated decision.

Will the U.S. Tax Court uphold a stipulation, agreement, or decision entered into by an unlicensed professional? In the Shamrock case the answer is absolutely. The Court held that the attorney's loss of his license did not result in the couple's suffering any prejudice, let alone any injustice. The Court reasoned that the loss of license could easily be cured by the attorney paying his bar dues and completing the required ethics course. The Court also found that in all other respects, the attorney was competent and properly represented his clients.

Conclusion

We live in an age where consumerism is all important - the consumer is king. That does not mean however, that the consumer can be negligent or cavalier when it comes to the engagement of services and especially professional services. I am willing to wager that if you ask your attorney, CPA, physician, or stock broker if he or she is currently licensed and in good standing, your professional, while surprised at your request, will admire and respect your diligence. The best person to protect your rights is you!

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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures - A Manual for Practitioners" published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures - A Manual for Practitioners" published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.

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