This nasty development meant we finally had the “smoking gun” – we had defined Todd’s negligence and it was costing us everything with the IRS.
Stan was seriously concerned about A&J’s failure to move forward with the malpractice case in a timely way, so -- in the essence of time and to keep things moving -- Stan, along with two partners, started drafting a complaint against Todd. As mentioned in the previous post, we still didn’t know exactly what he had done wrong, nor did we have an exact amount on our damages, but we were worried about the statute of limitations and Stan felt that if he drafted the complaint himself, it might get A&J off the dime to at least file the complaint, even if they didn’t pursue it.
By the end of 2010, we parted ways with A&J on the malpractice portion of our cases (they kept the IRS portion) because they just did not want to take it on. We switched to representation by Springer and Steiner for the malpractice case, going through the same tedious steps of getting all our partners notified and having them sign the engagement letter.
Settlement Talks Break Down
Meanwhile, our settlement talks with the IRS (handled by A&J) broke down, and it boiled down to the fact that the Noah Land Trust (to whom we had donated the Conservation Easements) had not sent us Contemporaneous Written Acknowledgements (CWAs) (otherwise just known as “donor receipts,”) for the Conservation Easement donations we had made. We had stacks and stacks of paperwork for every single donation to prove that we had done it – there was no doubt that we had made these donations. But the IRS was sticking to this bit of minutia, in spite of all our evidence that we had made the donation.
In fact, Paul Geer, the Executive Director Noah Land Trust, insisted he had sent them, he would send an affidavit to that effect, and would send new ones – none of which the IRS found acceptable. (And, we know that Noah Land Trust had not sent them, as 1) our record keeping was impeccable and 2) it was the one single document missing for every single donation.) So, lacking this single piece of paper meant we were screwed. Totally, royally screwed.
As a result, A&J came to an agreement with the IRS wherein we would basically have to pay about 99% of what they said we owed. The settlement granted us a 1% discount, or some such nonsense. We were outraged with the IRS and we were outraged with A&J – after spending a year working with them and tens of thousands of dollars in fees, they had garnered us a 1% discount. Big deal!
The Smoking Gun
But this very nasty development meant two important (albeit unhappy things): 1) we were beginning to know what our losses were; and 2) we now had the “smoking gun” – we had defined Todd’s negligence. As a “one-stop shop” he had failed to ensure that we received the CWAs, to ensure that Noah had sent them, to ensure that we had received them, and it was costing us everything with the IRS.
So, we had parted ways with A&J over their resistance and foot-dragging on the malpractice case, and now we were disgusted by the horrible settlement offer from the IRS that they pushing on us, so we also parted ways with them on the IRS matter as well. By January 11, 2011, we had visited with Scott Greiner at Moye & White, who agreed to take on the IRS portion of our troubles. (Is your head spinning?)
You can imagine our despair over having to move from one attorney to the next. While it is easy to assume we were somehow to blame for all these attorney changes, please remember, we were on the leading edge of a fairly new issue and there were significant political and social overtones to our cases. You may recall that Todd was working at Wishful Thinking, one of the largest law firms in Denver, who was represented by one of the other largest law firms in Denver. So the law firms we approached for representation, especially smaller ones, simply did want to take them on.
So, there we were again – telling our story to new attorneys (again), bringing them up to speed on the complicated details (again), and spending all our time providing documents to these two new law firms (again) and trying to convince our poor partners that they had to sign new engagement letters (again) and that this was all going to turn out okay!
I don’t remember ever taking a real break in those years. I was still working at my unsuitable job in Westminster, north of Denver, earning money we desperately needed to get us through this mess. In those days, I really thought my head was going to burst into flames, and as I’m now looking back through the hundreds of emails between us and our partners over every little thing – their K-1s, notices from the IRS, updates on attorneys, spreadsheets, and so on – all I can say is, “it was a mess!” ©Sharon Cairns Mann