Theodore Warshaw was one of Bernard Madoff's victims. Warshaw died in 2006, and the executors of his
Estate filed an Estate Tax return with the New Jersey Division of Taxation, on
which they reported the value of his Madoff investments to be $1,463,733. After the Madoff scam became public, the
executors filed a claim for a refund, contending that the true value of Warshaw's
investment with Madoff was zero.
The case went to the Tax Court of New Jersey, which issued
a decision on the matter.
What is notable in that decision is Footnote 1, reproduced
in its entirety as follows:
"n. 1 Although the Director contends that he has 'insufficient
information or knowledge to form a belief as to the truth of Plaintiff's
statement that in December 2008 Bernard Madoff was
exposed as engaging in the largest Ponzi scheme in U.S. history', the Court
finds that in December 2008 the Madoff Ponzi
scheme became public. The Director also claims that he has insufficient
knowledge to admit that in March 2009, Madoff pled
guilty to eleven Federal charges in Federal District Court. The court finds
that this is evidenced in Trustee Picard's Interim Report as provided by
Plaintiff in its papers."
Having once been in the employ of the
Internal Revenue Service, I can fully appreciate the excesses to which a tax
collector -- ANY tax collector -- can gravitate. That is the nature of the taxation function,
even with the most ethical of tax personnel.
This is why giving too much power to the
taxation function is very dangerous.
Which is precisely why the individual health
insurance mandate penalty in Obamacare needs to be repealed.
Quis custodiet ipsos custodes?
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