INTRODUCTION This case presents students with an active-learning setting in which to conduct tax research and tax planning via a developing four-part timeline. Students first evaluate an international deferred compensation plan that a potential client is considering. The focus is on determining whether the plan complies with U.S. tax law, and if not, on developing recommendations on modifications to make the plan compliant. Next, students learn the individual has acted, and they must evaluate the implemented plan. Third, students learn the individual has been indicted for tax evasion. Then, they must consider whether their firm should agree to work with the individual and whether relying on the advice of profes- sionals can be used as a defense against tax evasion charges. Finally, students learn that the individual has been convicted of criminal tax evasion. Moreover, the trial evidence suggests that the tax evasion extended beyond the facts known from the prior timeline, i.e., the individual participated in the evasion. Students must re-evaluate whether their firm should agree to work with the individual in appealing his conviction. The case materials are based on an actual case. ASSIGNMENT 1: INTRODUCTION AND INITIAL FACTS Following graduation from West Point with a degree in Basic Science and an emphasis in Anatomy and Physiology, Glenn E. Rachis entered the United States Army. There, he served as a Second Lieutenant line infantry officer and earned a Bronze Star. While active in Army service, he discovered his true calling and entered the New York Chiropractic College's Doctor of Chiropractic Program. Upon graduation, he joined the Army Medical Services Corps. Eventually, Dr. Rachis was promoted to 0-4 (Major) and served as Clinic Chief in Darmstadt, Germany until his retirement and honorable discharge from the service (at age 46). At retirement, Dr. Rachis was earning military compensation of $119,920. The breakdown of his final year's pay from the Army can be found in Table 1 below. After retiring from the Army, Dr. Rachis relocated to Worcester, Massachusetts where he purchased a 10 year-old personal injury practice in the Blackstone Val- ley area from a retiring chiropractor. The building exceeded 2,000 square feet, including reception, four exam/treat rooms, two diagnostic rooms, a manage- ment office, massage room, radiology room, and dark room. The building was equipped with state of the art equipment. Table 1: Dr. Rachis' Final Army Payments $6,252.30 $1,131.60 $192.74 Monthly Base Pay Monthly BAQ (Basic Allowance for Quarters) Monthly BAS (Basic Allowance for Subsistence) Monthly Variable Special Pay for Medical Officers Monthly Board Certified Special Pay Total Monthly Pay Total Annual Pay $666.66 $500.00 $8,743.30 $104,919.60 Additional Annual Pay for Medical Officers $15,000.00 Total 2000 (Annual) Military Pay $119,919.60 Dr. Rachis was excited about opening his own practice and moving his family back to the U.S. The practice was well-established in the community, with a very strong network of referring attorneys and other legal entities. The focus of the practice was personal injury (80 percent of total services). Well care, acute care, rehab, and expert witness testimony together comprised the remaining 20 percent of total services. The patient population was diverse and lived within a 10 mile radius. The sources of patients were as follows: 75 percent attorney referral, 15 percent direct mail, 6 percent employer referral, 4 percent patient referral. The practice accepted only cash and direct billing from attorneys. For the initial year 2001, Dr. Rachis operated his practice as a sole proprietor- ship. Given that, he reported the income on his personal tax return (Schedule C, Form 1040). However, upon the advice of counsel, Dr. Rachis incorporated his practice under the name Glenn E. Rachis, DC, PC. The practice then operated as a C corporation and under the name Blackstone Valley Chiropractic Clinic. During the first three years (2001-2003), the practice generated gross revenues of more than $700,000 per year and net income in excess of $600,000 per year. In 2003, the practice had more than 2,000 patient visits, including more than 600 new patients. Dr. Rachis' take home pay before income taxes in 2003 was $480,620. Federal income taxes totaled $138,308. "THE CAPS PROGRAM. Due to the rapid and significant change in his personal income, Dr. Rachis became interested in succession planning, asset protection, and retirement funding. In early 2004, Dr. Rachis' personal attorney (also a practicing CPA) shared with him a brochure (Appendix 1) he received from an entity by the name of Concept Asset Protection Systems (CAPS), LLC. The brochure described a seminar titled Asset Protection-Tax Deferral-Investment Strategies to be held in Las Vegas, NV in March 2004. Following the recommendation of his personal attorney, Dr. Rachis traveled to Las Vegas, Nevada to attend the two-day seminar. The seminar leader's intro- duction indicated that he had extensive experience in asset protection, estate and succession planning, and establishing income deferral programs and planning through tax treaties and appropriate domestic and international structures. The seminar leader also stated that he had represented numerous clients throughout the world and represented the U.S. in the China International Trade Talks. The advice that Dr. Rachis received spanned several topics including the utilization of an international nonqualified deferred compensation plan. The seminar pro- vided Dr. Rachis with a retirement plan analysis, complete with the backing of legal opinions supported by numerous cases and regulations (see Appendix 2 for seminar materials). After meeting with the seminar leader and prior to agreeing to adopt the CAPS program, Dr. Rachis sought the independent opinion of his attorney (also a CPA), who reviewed the legal opinions and seminar documents provided to Dr. Rachis. Task #1 Dr. Rachis also sought an accounting firm to evaluate the plan. Martin Zingales is currently employed by a regional accounting firm. Not only does he have his CPA, but he is also a CFE. Ray Bertman, a partner in the accounting firm, asks Martin to determine if using the CAPS program would cause Dr. Rachis, a potential client, to commit fraud or income tax evasion. Martin must prepare a research memo to address the items below using the tax rate schedule in Table 2. 1. 2. Determine the potential tax savings had Rachis used the CAPS program in 2003 to defer $400,000 of taxable income (taxable income of $80,620 rather than $480,620). Analyze the materials provided by Dr. Rachis (Appendix 1 and Appendix 2), and assess whether the proposed program is consistent with the objec- tive of retirement planning. Specifically, using seminar materials as facts, evaluate whether the proposed program is in compliance with U.S. tax law. If it is not in compliance, develop recommendations on how to change it to comply with the U.S. tax law. Table 2: Schedule Y-1 Married Filing Jointly or Qualifying Widow(er) If taxable income Is over- But not over- $0 $16,700 10% of the amount over $0 $16,701 $67,900 $1,670.00 plus 15% of the amount over $16,700 $137,050 $9,350.00 plus 25% of the amount over $67,900 $67,901 $137,051 $208,850 $26,637.50 plus 28% of the amount over $137,050 $208,851 $372,950 $46,741.50 plus 33% of the amount over $208,850 $372,951 no limit $100,894.50 plus 35% of the amount over $372,950 ASSIGNMENT 2: DR. RACHIS IMPLEMENTS THE CAPS PROGRAM Following the two day seminar, Dr. Rachis, with the assistance of his attorney (who is also a practicing CPA), made several changes to his business consistent with the CAPS program. Dr. Rachis had no formal training in accounting, law, or business, and as a chiropractor, little experience. He relied on the advice and expertise of others. Dr. Rachis first created the corporation entitled Glenn E. Rachis, PC. The corporation continued to do business (DBA) under the name Blackstone Valley Chiropractic Clinic (BVCC). Dr. Rachis reported on his tax returns that he devoted 100 percent of his time and services to the corporation. Then, Dr. Rachis resigned from Glenn E. Rachis, PC and signed a long-term personal services contract to become an employee of Executive Recruitment and Leasing Services (ERLS), an existing employee leasing and deferred compensation company operating in Ireland. The contract terms provided that Dr. Rachis was to be assigned duty at the location and discretion of ERLS, and that Dr. Rachis would make himself available whenever and wherever ERLS required. ERLS agreed to promote Dr. Rachis services worldwide. The contract specified that ERLS would pay Dr. Rachis a salary of $72,000 per year, and that ERLS would place $360,000 per year in a deferred compensation account (offshore trust) for Dr. Rachis. Soon after, a Nevada company, Domestic Executive Leasing Services (DELS), contracted with ERLS for the exclusive rights to the professional services of Dr. Rachis. Glenn E. Rachis, PC was understaffed and was fortunate enough to find a chiropractor (on contract with ERLS), Dr. Rachis, for an annual lease payment of $480,000 (summary in Table 3). Table 3: Rachis' Program Prior to CAPS Program After CAPS Program Salary / Payment by Glenn E. Rachis, PC $480,000 $480,000 Total Administrative Fees ($48,000) U.S. Income Tax ($138,362) $0* Net to Dr. Rachis $341,638 $432,000 Deferred Income $0 $360,000 Disposable Income $341,638 $72,000 *Dr. Rachis claimed the foreign earned income tax exemption. Task #2 Ray Bertman provided Martin with the updated facts and asks him to prepare a research memo to address the items below, using the tax rate schedule in Table 2. 1. 2. Compare the actual program implemented by Dr. Rachis to the model outlined in the CAPS seminar materials. Examine the tax savings to see if it matches what was claimed in the seminar and the estimates in your original memo (Task #1). Determine whether the implemented program complies with U.S. tax law. If it does not, outline the modifications needed to make it firmly in compliance with U.S. tax law. 3. Suggested extension: Dr. Rachis implemented the CAPS program as part of retirement planning. Evaluate the retirement savings accumulated using $360,000, $400,000, and $300,000 of annual deferrals. Use a five percent rate of return and a ten year horizon (to retirement date). ASSIGNMENT 3: DR. RACHIS INDICTED FOR TAX EVASION Glenn E. Rachis was indicted by a federal grand jury on charges of tax evasion in May 2009. According to the indictment, Dr. Rachis evaded federal income taxes for the years 2004, 2005, and 2006, with actions that fraudulently reduced his taxable income. Specifically, Dr. Rachis entered into an improper offshore executive leasing and deferred compensation scheme by contracting his profes- sional services to Executive Recruitment and Leasing Services (ERLS), an Irish entity, which leased his services to Domestic Executive Leasing Services (DELS), a U.S. company, which then leased his services back to Glenn E. Rachis, PC. All charges were in violation of I.R.C. Section 7201. Pending trial, Dr. Rachis was released on a $150,000 bond, with travel restrictions requiring him to sur- render his passport. Dr. Rachis has asked your firm to represent him before the I.R.S. and to work with his defense attorney to develop a strategy for dealing with the legal charges. Dr. Rachis claims that he does not know the tax law, and because he relied on the advice of his attorney (also a CPA), the liability for incorrectly setting up the plan should be his attorney's problem. TIMELINE: INDICTMENT FOR CRIMINAL TAX EVASION Task #3 Ray Bertman provided Martin with the updated facts and asks him to up- date his prior research. Martin must prepare a research memo to address the following items. 1. Analyze the facts and law and recommend whether your firm should work with Dr. Rachis and his attorney to resolve the charges. Your firm's policy is to represent only clients that are in compliance with tax law. 2. Evaluate whether and how Dr. Rachis' liability for fraudulent tax evasion changes, given his reliance on his attorney (also a CPA). ASSIGNMENT 4: RACHIS CONVICTED OF TAX EVASION Glenn E. Rachis was convicted on four counts of tax evasion in March 2011. Dr. Rachis was sentenced to serve five years in prison (three years of supervised probation after his release), and paid a $10,000 criminal fine and $100,000 in prosecution costs. At trial, in addition to the grand jury evidence, the prosecu- tion presented evidence that Rachis' deferred compensation funds were returned to the U.S. using nominees to conceal his involvement. Once the funds were directed back to Rachis, he invested the funds in real estate. Further trial evidence revealed that beginning in 2008, the I.R.S. attempted to audit tax returns filed by Dr. Rachis for 2004, 2005 and 2006. Throughout 2008, all I.R.S. communica- tions mailed to the street address of Blackstone Valley Chiropractic Clinic were returned (though unsealed) marked as addressee not known. On five different occasions in 2009, when an I.R.S. agent visited the clinic to personally contact Dr. Rachis, the clinic receptionist reported Dr. Rachis was traveling and unavail- able. Dr. Rachis failed to keep three appointments set up by the examining agent. Dr. Rachis plans to appeal the original court's conviction. He has asked your firm to represent him before the I.R.S. and to work with his new defense attorney to develop a strategy for the appeal. Dr. Rachis expressed regret for getting into such an aggressive arrangement and provided plausible assurances that he wants to pay the taxes owed and resolve the matter. TIMELINE: GUILTY VERDICT AND APPEAL Task #4 Ray Bertman emailed Martin the news that Dr. Rachis was convicted. He asks Martin to prepare a research memo to address the following items. 1. Re-analyze the facts and recommend whether your firm should work on the Dr. Rachis appeal. Firm policy is to represent only clients that are in compliance with tax law. Evaluate Dr. Rachis' liability for tax evasion, taking into consideration his reliance on his attorney (also a CPA). 2. In responding to both 1 and 2, explicitly address the impact, if any, of the trial evidence of Rachis efforts to avoid I.R.S. contact as well as his personal access to deferred compensation funds on your assessment. INTRODUCTION This case presents students with an active-learning setting in which to conduct tax research and tax planning via a developing four-part timeline. Students first evaluate an international deferred compensation plan that a potential client is considering. The focus is on determining whether the plan complies with U.S. tax law, and if not, on developing recommendations on modifications to make the plan compliant. Next, students learn the individual has acted, and they must evaluate the implemented plan. Third, students learn the individual has been indicted for tax evasion. Then, they must consider whether their firm should agree to work with the individual and whether relying on the advice of profes- sionals can be used as a defense against tax evasion charges. Finally, students learn that the individual has been convicted of criminal tax evasion. Moreover, the trial evidence suggests that the tax evasion extended beyond the facts known from the prior timeline, i.e., the individual participated in the evasion. Students must re-evaluate whether their firm should agree to work with the individual in appealing his conviction. The case materials are based on an actual case. ASSIGNMENT 1: INTRODUCTION AND INITIAL FACTS Following graduation from West Point with a degree in Basic Science and an emphasis in Anatomy and Physiology, Glenn E. Rachis entered the United States Army. There, he served as a Second Lieutenant line infantry officer and earned a Bronze Star. While active in Army service, he discovered his true calling and entered the New York Chiropractic College's Doctor of Chiropractic Program. Upon graduation, he joined the Army Medical Services Corps. Eventually, Dr. Rachis was promoted to 0-4 (Major) and served as Clinic Chief in Darmstadt, Germany until his retirement and honorable discharge from the service (at age 46). At retirement, Dr. Rachis was earning military compensation of $119,920. The breakdown of his final year's pay from the Army can be found in Table 1 below. After retiring from the Army, Dr. Rachis relocated to Worcester, Massachusetts where he purchased a 10 year-old personal injury practice in the Blackstone Val- ley area from a retiring chiropractor. The building exceeded 2,000 square feet, including reception, four exam/treat rooms, two diagnostic rooms, a manage- ment office, massage room, radiology room, and dark room. The building was equipped with state of the art equipment. Table 1: Dr. Rachis' Final Army Payments $6,252.30 $1,131.60 $192.74 Monthly Base Pay Monthly BAQ (Basic Allowance for Quarters) Monthly BAS (Basic Allowance for Subsistence) Monthly Variable Special Pay for Medical Officers Monthly Board Certified Special Pay Total Monthly Pay Total Annual Pay $666.66 $500.00 $8,743.30 $104,919.60 Additional Annual Pay for Medical Officers $15,000.00 Total 2000 (Annual) Military Pay $119,919.60 Dr. Rachis was excited about opening his own practice and moving his family back to the U.S. The practice was well-established in the community, with a very strong network of referring attorneys and other legal entities. The focus of the practice was personal injury (80 percent of total services). Well care, acute care, rehab, and expert witness testimony together comprised the remaining 20 percent of total services. The patient population was diverse and lived within a 10 mile radius. The sources of patients were as follows: 75 percent attorney referral, 15 percent direct mail, 6 percent employer referral, 4 percent patient referral. The practice accepted only cash and direct billing from attorneys. For the initial year 2001, Dr. Rachis operated his practice as a sole proprietor- ship. Given that, he reported the income on his personal tax return (Schedule C, Form 1040). However, upon the advice of counsel, Dr. Rachis incorporated his practice under the name Glenn E. Rachis, DC, PC. The practice then operated as a C corporation and under the name Blackstone Valley Chiropractic Clinic. During the first three years (2001-2003), the practice generated gross revenues of more than $700,000 per year and net income in excess of $600,000 per year. In 2003, the practice had more than 2,000 patient visits, including more than 600 new patients. Dr. Rachis' take home pay before income taxes in 2003 was $480,620. Federal income taxes totaled $138,308. "THE CAPS PROGRAM. Due to the rapid and significant change in his personal income, Dr. Rachis became interested in succession planning, asset protection, and retirement funding. In early 2004, Dr. Rachis' personal attorney (also a practicing CPA) shared with him a brochure (Appendix 1) he received from an entity by the name of Concept Asset Protection Systems (CAPS), LLC. The brochure described a seminar titled Asset Protection-Tax Deferral-Investment Strategies to be held in Las Vegas, NV in March 2004. Following the recommendation of his personal attorney, Dr. Rachis traveled to Las Vegas, Nevada to attend the two-day seminar. The seminar leader's intro- duction indicated that he had extensive experience in asset protection, estate and succession planning, and establishing income deferral programs and planning through tax treaties and appropriate domestic and international structures. The seminar leader also stated that he had represented numerous clients throughout the world and represented the U.S. in the China International Trade Talks. The advice that Dr. Rachis received spanned several topics including the utilization of an international nonqualified deferred compensation plan. The seminar pro- vided Dr. Rachis with a retirement plan analysis, complete with the backing of legal opinions supported by numerous cases and regulations (see Appendix 2 for seminar materials). After meeting with the seminar leader and prior to agreeing to adopt the CAPS program, Dr. Rachis sought the independent opinion of his attorney (also a CPA), who reviewed the legal opinions and seminar documents provided to Dr. Rachis. Task #1 Dr. Rachis also sought an accounting firm to evaluate the plan. Martin Zingales is currently employed by a regional accounting firm. Not only does he have his CPA, but he is also a CFE. Ray Bertman, a partner in the accounting firm, asks Martin to determine if using the CAPS program would cause Dr. Rachis, a potential client, to commit fraud or income tax evasion. Martin must prepare a research memo to address the items below using the tax rate schedule in Table 2. 1. 2. Determine the potential tax savings had Rachis used the CAPS program in 2003 to defer $400,000 of taxable income (taxable income of $80,620 rather than $480,620). Analyze the materials provided by Dr. Rachis (Appendix 1 and Appendix 2), and assess whether the proposed program is consistent with the objec- tive of retirement planning. Specifically, using seminar materials as facts, evaluate whether the proposed program is in compliance with U.S. tax law. If it is not in compliance, develop recommendations on how to change it to comply with the U.S. tax law. Table 2: Schedule Y-1 Married Filing Jointly or Qualifying Widow(er) If taxable income Is over- But not over- $0 $16,700 10% of the amount over $0 $16,701 $67,900 $1,670.00 plus 15% of the amount over $16,700 $137,050 $9,350.00 plus 25% of the amount over $67,900 $67,901 $137,051 $208,850 $26,637.50 plus 28% of the amount over $137,050 $208,851 $372,950 $46,741.50 plus 33% of the amount over $208,850 $372,951 no limit $100,894.50 plus 35% of the amount over $372,950 ASSIGNMENT 2: DR. RACHIS IMPLEMENTS THE CAPS PROGRAM Following the two day seminar, Dr. Rachis, with the assistance of his attorney (who is also a practicing CPA), made several changes to his business consistent with the CAPS program. Dr. Rachis had no formal training in accounting, law, or business, and as a chiropractor, little experience. He relied on the advice and expertise of others. Dr. Rachis first created the corporation entitled Glenn E. Rachis, PC. The corporation continued to do business (DBA) under the name Blackstone Valley Chiropractic Clinic (BVCC). Dr. Rachis reported on his tax returns that he devoted 100 percent of his time and services to the corporation. Then, Dr. Rachis resigned from Glenn E. Rachis, PC and signed a long-term personal services contract to become an employee of Executive Recruitment and Leasing Services (ERLS), an existing employee leasing and deferred compensation company operating in Ireland. The contract terms provided that Dr. Rachis was to be assigned duty at the location and discretion of ERLS, and that Dr. Rachis would make himself available whenever and wherever ERLS required. ERLS agreed to promote Dr. Rachis services worldwide. The contract specified that ERLS would pay Dr. Rachis a salary of $72,000 per year, and that ERLS would place $360,000 per year in a deferred compensation account (offshore trust) for Dr. Rachis. Soon after, a Nevada company, Domestic Executive Leasing Services (DELS), contracted with ERLS for the exclusive rights to the professional services of Dr. Rachis. Glenn E. Rachis, PC was understaffed and was fortunate enough to find a chiropractor (on contract with ERLS), Dr. Rachis, for an annual lease payment of $480,000 (summary in Table 3). Table 3: Rachis' Program Prior to CAPS Program After CAPS Program Salary / Payment by Glenn E. Rachis, PC $480,000 $480,000 Total Administrative Fees ($48,000) U.S. Income Tax ($138,362) $0* Net to Dr. Rachis $341,638 $432,000 Deferred Income $0 $360,000 Disposable Income $341,638 $72,000 *Dr. Rachis claimed the foreign earned income tax exemption. Task #2 Ray Bertman provided Martin with the updated facts and asks him to prepare a research memo to address the items below, using the tax rate schedule in Table 2. 1. 2. Compare the actual program implemented by Dr. Rachis to the model outlined in the CAPS seminar materials. Examine the tax savings to see if it matches what was claimed in the seminar and the estimates in your original memo (Task #1). Determine whether the implemented program complies with U.S. tax law. If it does not, outline the modifications needed to make it firmly in compliance with U.S. tax law. 3. Suggested extension: Dr. Rachis implemented the CAPS program as part of retirement planning. Evaluate the retirement savings accumulated using $360,000, $400,000, and $300,000 of annual deferrals. Use a five percent rate of return and a ten year horizon (to retirement date). ASSIGNMENT 3: DR. RACHIS INDICTED FOR TAX EVASION Glenn E. Rachis was indicted by a federal grand jury on charges of tax evasion in May 2009. According to the indictment, Dr. Rachis evaded federal income taxes for the years 2004, 2005, and 2006, with actions that fraudulently reduced his taxable income. Specifically, Dr. Rachis entered into an improper offshore executive leasing and deferred compensation scheme by contracting his profes- sional services to Executive Recruitment and Leasing Services (ERLS), an Irish entity, which leased his services to Domestic Executive Leasing Services (DELS), a U.S. company, which then leased his services back to Glenn E. Rachis, PC. All charges were in violation of I.R.C. Section 7201. Pending trial, Dr. Rachis was released on a $150,000 bond, with travel restrictions requiring him to sur- render his passport. Dr. Rachis has asked your firm to represent him before the I.R.S. and to work with his defense attorney to develop a strategy for dealing with the legal charges. Dr. Rachis claims that he does not know the tax law, and because he relied on the advice of his attorney (also a CPA), the liability for incorrectly setting up the plan should be his attorney's problem. TIMELINE: INDICTMENT FOR CRIMINAL TAX EVASION Task #3 Ray Bertman provided Martin with the updated facts and asks him to up- date his prior research. Martin must prepare a research memo to address the following items. 1. Analyze the facts and law and recommend whether your firm should work with Dr. Rachis and his attorney to resolve the charges. Your firm's policy is to represent only clients that are in compliance with tax law. 2. Evaluate whether and how Dr. Rachis' liability for fraudulent tax evasion changes, given his reliance on his attorney (also a CPA). ASSIGNMENT 4: RACHIS CONVICTED OF TAX EVASION Glenn E. Rachis was convicted on four counts of tax evasion in March 2011. Dr. Rachis was sentenced to serve five years in prison (three years of supervised probation after his release), and paid a $10,000 criminal fine and $100,000 in prosecution costs. At trial, in addition to the grand jury evidence, the prosecu- tion presented evidence that Rachis' deferred compensation funds were returned to the U.S. using nominees to conceal his involvement. Once the funds were directed back to Rachis, he invested the funds in real estate. Further trial evidence revealed that beginning in 2008, the I.R.S. attempted to audit tax returns filed by Dr. Rachis for 2004, 2005 and 2006. Throughout 2008, all I.R.S. communica- tions mailed to the street address of Blackstone Valley Chiropractic Clinic were returned (though unsealed) marked as addressee not known. On five different occasions in 2009, when an I.R.S. agent visited the clinic to personally contact Dr. Rachis, the clinic receptionist reported Dr. Rachis was traveling and unavail- able. Dr. Rachis failed to keep three appointments set up by the examining agent. Dr. Rachis plans to appeal the original court's conviction. He has asked your firm to represent him before the I.R.S. and to work with his new defense attorney to develop a strategy for the appeal. Dr. Rachis expressed regret for getting into such an aggressive arrangement and provided plausible assurances that he wants to pay the taxes owed and resolve the matter. TIMELINE: GUILTY VERDICT AND APPEAL Task #4 Ray Bertman emailed Martin the news that Dr. Rachis was convicted. He asks Martin to prepare a research memo to address the following items. 1. Re-analyze the facts and recommend whether your firm should work on the Dr. Rachis appeal. Firm policy is to represent only clients that are in compliance with tax law. Evaluate Dr. Rachis' liability for tax evasion, taking into consideration his reliance on his attorney (also a CPA). 2. In responding to both 1 and 2, explicitly address the impact, if any, of the trial evidence of Rachis efforts to avoid I.R.S. contact as well as his personal access to deferred compensation funds on your assessment