"Late Filer Syndrome" is a Valid Defense?

Criminal charges are yet to be filed, but the lawyers for Charles J. O’Byrne, the senior aid to New York Governor David Paterson, are invoking a very interesting defense for their client’s failure to file or pay any state or federal income taxes from 2001 to 2005.  Tax lawyer Richard S. Kestenbaum maintains that Mr. O’Byrne, whose current salary as chief of staff to Governor Paterson is $178,500, could not bring himself to annually fill out tax forms because of the mental anguish and further depression that it would cause him to do so (O’Byrne has suffered with several bouts of depression throughout his career); some are calling this defense “late filer syndrome” or “non-filer syndrome.” 

To be fair to Mr. O’Byrne, he has successfully repaid his debts to both the state of New York and the IRS, recently completing the repayment of approximately $300,000 in debts shortly after the New York Post approached Governor Paterson’s office regarding the supposed tax evasion.  The IRS has not yet committed to pursuing any further criminal action against him, and it is unclear whether it will do so. 

Apparently this defense argument is not a very new or original one, and “late filer syndrome” has been cited in several tax evasion cases prior to Mr. O’Byrne’s current situation.  In fact, the IRS eventually dropped criminal charges against a New York surgeon in 1994 who had refused to pay taxes because of a chronic “aversion to filling out forms.”  The Court never had to make a ruling in this case, and there has not been a recent or defined precedent to deal with such a defense other than if the IRS pursues legal action against a non-filer, the agency must prove that the defendant demonstrated a “voluntary and intentional” decision not to file. 

Defining “voluntary and intentional” can obviously become very difficult if the accused can make a credible argument for having a mental disorder.  It is evident that criminal trial arguments would probably center around whether Mr. O’Byrne’s pre-existing depression was further exacerbated by completing his tax return, or if it is even possible that the very act of filling out tax forms can trigger a new mental disorder that a filer previously did not have, making it impossible to “voluntarily” decide not to comply with the law. 

Although I do not wish litigation on anyone, I find myself hoping that the IRS seeks a criminal trial against O’Byrne to satisfy my curiosity on how the Court would rule and what legal precedent it would set.  I would hope that the legal bar would be set relatively low for the IRS to prove that a non-filer acted in a “voluntary and intentional” manner. If the opposite became true, and “late filer syndrome” gained further credibility as a defense, could that open the door to lawsuits against the IRS for its negligence in causing the mental anguish and stress of others by knowingly making them fill out forms? That seems highly unlikely, but crazier things have happened.

Comments

[Jason Royer]

Just when you think you have seen it all, another government "official" comes out of the woodwork to prove you wrong. While there seem to be many issues in this case (what did Gov. Patterson know, who was notified of Mr. O’Byrne’s tax issues, why wasn’t there any effort by the Gov. or others knowledgeable of the situation to make Mr. O’Byrne withhold a greater portion of his healthy salary towards taxes). It seems that Mr. O’Byrne was only able to pay the back taxes after the NY Post got its hands on the story.

While I experience a similar dislike for filing my tax returns, (perhaps a better name for it would be "hate filing syndrome" as I like to file early in the event I am owed a return) I find it deplorable that a public official would attempt to use such a defense. I think the defendant should prove that they are incapable of performing other such duties, like holding a job (which this clown is obviously doing as he collects a hefty check made possible by the taxpayers he is working for).

I am fully aware of the needs and rights of those with mental illnesses and even support a greater effort to cover mental illness treatments/issues via health insurance. I will argue, however, that there seems to an overabundance of “syndromes” in today’s society. There’s a syndrome for filing your taxes late? Really?

Here are the “symptoms” of “late filer syndrome”.

Quoting from the article http://cityroom.blogs.nytimes.com/2008/10/23/the-symptoms-of-failure-to-file-syndrome :

“In an article titled ” ‘Failure to File’ Syndrome: Legal and Medical Perspectives,” published in the New York Law Journal in 1994, Elliot Silverman, a lawyer, and Dr. Stephen J. Coleman, a practicing psychiatrist, describe the traits shared by sufferers of the syndrome:

1. They are sophisticated, both financially and with respect to taxes.
2. The reality of ultimate discovery of the failure to file is obvious to them.
3. The potential penalties, both financial and professional, are clear to them.
4. They acknowledge that these penalties will likely occur.
5. There is often no clear benefit to not filing, in that either (a) there is no significant tax due, or (b) they have the money to cover their tax liability, or (c) they can easily borrow the money to cover the liability.
6. They usually have a history of filing in the past.
7. They sometimes get extensions and make some estimated payments.
8. They often are anxious and obsessed about not filing.
9. And yet, exhibiting self-destructive behavior like lemmings rushing to the sea, they do not file until the I.R.S. is upon them.”

After reading the symptoms above, I have concluded that Dr. Stephen J. Coleman is a professional QUACK. His article is evidence that you can find any number of “professionals” to argue/testify for anything in your favor.

With all of that being said, I will ask two simple questions to close my comment.

1. What ever happened to personal responsibility – especially among public officials?

2. Can anyone out there write an article about “dislike of final exam” syndrome?

[Chris Johnson]

Great response, Jason. I would have had trouble articulating this sentiment without getting off on a rant.

It occurs to me that Mr. O'Byrne would not actually have to fill out a form if he were to hire a tax professional. I don't fill out tax forms...I pay someone else to do it for me.

To Jason's point, this "affliction" seems quite specific. If Mr. O'Byrne is unable to fill out forms, would other problems not manifest themselves as well? Rather convenient...for not paying taxes.

[Sarita Gavhane]

Interesting post!

Also, Chris, you make an interesting point - he could easily have hired a tax professional to fill out his forms, but then the point should be raised whether its actually filling out the forms that "depresses" him or if its the gathering of the information required for the tax return that "depresses" him (and thus hiring a tax professional would necessarily alleviate his disorder)

Also, if this guy is ajudicated mentally incompentant, then who is to say that such a disorder wouldn't cause an inability to participate as a citizen (i.e. vote, hold public office, etc), and thus the question should be raised whether he should be in public office in the first place?