Law Humor

Lawyer Says Client's Tax Problems Caused by LFS: "Late-Filing Syndrome"

By Kevin Underhill

In October, the lawyer for a man who did not pay taxes or file returns for five years said that his client had been unable to do so because he suffers from a medical condition called "Late-Filing Syndrome," which renders it difficult or impossible for the affected to file their tax returns on time.

Making this an even more tragic case, the man's LFS was accompanied, as it so often is, by Large-Check-Writing Aversion Disorder.

According to the New York Times, the condition that Richard Kestenbaum was describing has also been called "Failure-to-File Syndrome" or simply "Non-Filing Syndrome," although these may just be more serious forms of the disease.  Kestenbaum's client, Charles O'Byrne, seems to be in remission, because he did start paying taxes again in 2005.  Oddly, though, none of these disabling conditions are listed in the Diagnostic and Statistical Manual of Mental Disorders, nor are they recognized by the American Psychiatric Association.

They are recognized by tax lawyers, though.  The Times quoted one as saying that claims of LFS, FFS or NFS are "not uncommon," because the IRS cannot get criminal penalties unless it can prove a decision not to file was voluntary and intentional, an element that this defense might negate.  "The burden is on the IRS," said tax lawyer Gerald Kafka, whose last name is either ideal or terrifying for a tax lawyer to have.  In most cases, I would guess, the IRS does not want to bother collecting evidence to meet that burden, at least if it can get the back taxes paid, and so the filing-disability claims continue.

"Most times, with professionals, [LFS sufferers] are very high-functioning people who otherwise complete all the ordinary tasks of their life," said Kestenbaum.  It may have been important to describe O'Byrne as otherwise "high-functioning," since he is currently the top aide to New York Governor David Paterson.  The revelation that O'Byrne owed almost $300,000 in back taxes has caused some difficulty for the administration.  The governor has said that O'Byrne told him about the tax problems some time ago and said he was dealing with them.  O'Byrne also allegedly disclosed the issue in January 2007 to Paterson's predecessor, former governor Eliot Spitzer.  (Spitzer, you may recall, was busy investigating other things at the time.)  Governor Paterson has said that an internal investigation had concluded the tax problems would not compromise O'Byrne's duties.

The LFS argument is somewhat baffling because it appears that O'Byrne does suffer from depression, which is a recognized disability and which might also have explained an inability to face complicated and daunting tasks or obligations.  The potential problem with that explanation, though, is that it might have raised questions -- possibly unfair ones -- about whether O'Byrne could handle his job duties, while the LFS explanation suggests he's fine as long as it isn't April 15.

It seems doubtful, though, that raising LFS instead of depression has ultimately done O'Byrne any good.  The governor's office distanced itself from the LFS claim recently, saying that the lawyer had only been speaking generally and that O'Byrne has never actually been diagnosed with LFS.  A spokesperson said that O'Byrne, who to his credit has paid off his taxes and also is no longer being treated for depression, has no plans to resign.

Link:  New York Times

Full post as published by Lowering the Bar on November 07, 2008 (boomark / email).