Paul L. Caron

Friday, March 5, 2010

IRS Suspends One of Boston's 'Most Highly Regarded' Tax Lawyers for 48 Months for Failing to File Tax Returns

The IRS today announced (IR-2010-27) the 48-month suspension of former Foley Hoag tax partner Kevin J. Kilduff for failing to file one federal tax return and for filing another five returns late. From the Office of Professional Responsibility's decision (No. 2008-12, Nov. 18, 2008):

The Respondent was employed as an attorney by the IRS for about five years, beginning in about 1993. Since that time he has been employed by, and a partner in, law firms, initially in Philadelphia and, at the present time, in Boston. His principal defenses herein are that he filed all his tax returns, including the 2002 Federal tax return that the Complainant alleges was not filed, although he admits that “a couple” of his returns may have been filed late. He also defends that all the returns were accurate and that every dollar of taxes that were due were paid. His other defense is that this matter was instituted as a personal vendetta against him by Revenue Officer 1 because of his “zealous” representation of a client in dealing with Revenue Officer 1, the IRS agent in the case. ...

In this regard, in about 1999, his mother was diagnosed with Illness 1 and he quit his job in Philadelphia and moved to Boston and moved in with his parents to care for his mother, and remained with them for the next five years. During this period, he and his sister cared for their parents, cooking and taking them to doctor appointments: “That’s why my tax returns were late.” He also testified that he is a partner in the fifth largest law firm in Boston and “one of the most highly regarded tax controversy attorneys in this city [Boston].” ...

Throughout the course of this matter, I was struck by the Respondent’s apparent disinterest in, or lack of respect for, this proceeding. ...

The Respondent’s two defenses herein are that the situation with his parent constituted reasonable cause for his tax delinquencies and should therefore be excused or mitigated, and that because this matter was instituted due to a vendetta by IRS Revenue Officer 1, this proceeding should be dismissed. I find that neither defense has merit. While I can sympathize with the Respondent and his obligations and sacrifices during this period, the record establishes that during the period encompassing tax years 2000 through 2005 he was employed full time for a major laws firm with yearly adjusted gross income ranging from $102,000 to $138,000. Further, while he had obligations caring for his parents during this period, it is difficult to imagine that he could not find the time to prepare and timely file these returns. Considering his expertise in the field, it should not have consumed an inordinate amount of time. I therefore reject the Respondent’s reasonable cause defense herein. ...

IRS News, Tax | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference IRS Suspends One of Boston's 'Most Highly Regarded' Tax Lawyers for 48 Months for Failing to File Tax Returns:


Says Tax professional "Suspension for 4 years? Does that not seem a little harsh? I mean, sure he failed to file, but is there anything indicating that it was willful? "

Anything indicating it was willful?
This falls under the category of man-on-the-street knows BS when hear hears it. This guy is a self professed tax whiz in his career; his own words are sufficient to create an almost insurmountable proof that he had every intention to not file his own taxes. The state need show nothing further to convince me that his failure to file was as willful as it gets. And if failure to file was not willful and instead was incompetence at practicing tax law then perhaps this is a good opportunity to take him out of the work force for that profession.

Posted by: nevins | Mar 7, 2010 2:18:48 PM

What you are witnessing is a reversion to a pre-1998 "out of control" IRS. Karen Hawkins, OPR Director, is on a crusade to punish any and all she can as much as she can (especially shocking given her background). She and other OPR people have said as much at the ABA, other Bar functions, and in writing.

Bill Wilkins is basically moving to a "please audit yourself" tax return with the disclosure form that large taxpayers will be required to attach to their tax returns. And why? The answer given at the ABA, other Bar functions, and in writing is that it will cut down on auditor work time and make audits more efficient. So the Form 1120RM (Road Map) is being introduced so you can do the IRS's work for them.

The findings of the ALJ make clear that something very fishy was going on with the Revenue Officer who turned Kilduff in to OPR. It happened at the exact, or near, same time the RO was battling it out with Kilduff. Kilduff alleged retaliation. Somehow the RO got ahold of Kilduff's tax return information and turned it in to OPR. Strange coincidence?

If OPR, the ALJ, and whoever at Treasury the appeal from the ALJ was taken to--and who doubled the ALJ's 24 months to 48--isn't interested in how the RO got Kilduff's private tax return information, I sure hope that TIGTA is interested. I still believe that improperly accessing a Taxpayer's private tax return information is one of the "10 deadly sins."

This IRS is after taxpayers, preparers, representatives, and anyone else they can get at. Congress is looking the other way because unlike 1998 when the country was flush now we need every last dollar the IRS can collect. Even though virtually since the inception of the income tax, I think Government (Congress, the White House, Treasury, the IRS) in this day and age where any transaction that has a tax aspect to it is suspect, or possibly criminal, needs to be reminded that "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes." Helvering v. Gregory, 69 F.2d 809, 810-811 (2d Cir. 1934), aff’d 293 U.S. 465 (1935).

Look, what he did was wrong, and maybe he was cavalier and not as respectful as he should have been, but the finding was that only 2002 amounted to disreputable conduct. I'd I have reviewed enough IRS transcripts of account to know how notoriously inaccurate they are (and have even been told so by those in the know). But alas . . .

A more humane Director of OPR never
Did in D.C. exist,
To nobody second,
She's certainly reckoned
A true philanthropist.
It is her very humane endeavour
To make, to some extent,
Each evil liver
A running river
Of harmless merriment.

Her object all sublime
She shall achieve in time —
To let the punishment fit the crime —
The punishment fit the crime;
And make each prisoner pent
Unwillingly represent
A source of innocent merriment!
Of innocent merriment!


As some day it may happen that a victim must be found,
He's got a little list —
He's got a little list —
Of society offenders who might well be underground,
And who never would be missed —
who never would be missed!

And that Nisi Prius nuisance, who just now is rather rife,
The Judicial humorist —
He's got him on the list!

But it really doesn't matter whom you put upon the list,
For they'd none of 'em be missed —
they'd none of 'em be missed!

Posted by: tax guy | Mar 7, 2010 10:38:33 AM

Let's assume Kilduff makes $200,000/year in his tax practice and that he could earn $90,000 year practicing in some other area of law (less because he presumably has more expertise in tax). Is it fair to characterize this decision as the equivalent of a $440,000 penalty for failure to file his 2002 return? Is that a fair outcome?

Posted by: Student | Mar 6, 2010 11:32:45 AM

No -- although the ALJ recommended 24 months, the IRS imposed a 48-month suspension.

Posted by: Paul Caron | Mar 6, 2010 6:32:07 AM

24 months, not 48.

Posted by: Steven | Mar 6, 2010 6:19:37 AM

Either someone forgot a zero on that adjusted gross, or else he's *really* good at what he does.

Posted by: anonymous | Mar 5, 2010 5:42:35 PM

Explain that income.

Posted by: Paco McDooby | Mar 5, 2010 3:34:48 PM

Suspension for 4 years? Does that not seem a little harsh? I mean, sure he failed to file, but is there anything indicating that it was willful? There are non-ethical penalties for his actions, and sure maybe his excuse would not be valid in front of a criminal court, but it certainly merits leniency in from of a professional responsibility tribunal. Also, it should be noted that this excuse was not used in response to an allegation of a lack of attention to a client, but merely in response to a lack of attention to his own personal matters. If caring for a loved one does not excuse you for personal failings in front of an ethical panel, what does? This smells fishy to me.

Posted by: IOn | Mar 5, 2010 2:40:32 PM

“one of the most highly regarded tax controversy attorneys in this city [Boston].”

Nonsense. This self-engrandizing clown (similar to the rear end of a horse, or is it just crybaby) should consider himself lucky. Owing taxes and using the money to help aged parents or any other personal purpose can be willful failure to pay, a misdemeanor. Not filing timely is obviously failure to file, the same misdemeanor.

Kilduff should also consider that making false statements and other forms of misconduct in the disbarment proceedings can be acted upon also.

Posted by: Tax Professional | Mar 5, 2010 2:49:49 AM

Did anyone else notice the inconsistency between what is stated in the Decision and what is stated in the Findings of Fact?

Posted by: WD Kebschull | Mar 4, 2010 7:47:35 PM