New York. Wednesday, January 3, 2002.
Marsha Cooper opened the heavy glass door of the I.R.S. building on Madison Avenue, allowing Kerri to enter. Normally, she went out of her way to avoid handling income tax issues, but she made an exception in in Kerri's case. Kerri was a friend and a very special person who needed a break. Marsha was determined to do whatever she could to ensure her client got one.
They were met by a smiling Niel Johnstone, again wearing his government issue dark blue suit. He still featured his black tasseled loafers, but perhaps in sympathy with his newest and largest client, he has switched to a fire-engine red tie. He was flanked by a tall sinister looking man with a helmet of greased jet black hair, parted in the middle. The tall man looked angry, ready to do battle.
"Hello, Miss King," Johnstone sang, extending his chubby hand to her. "Nice to see you again." He shook hands with Kerri, then turned to Marsha and extended his hand. "Hello, I'm Niel Johnstone. And you are?"
"Marsha Cooper, Miss King's attorney," she said. No smile.
Johnstone's smile evaporated as he waved his right hand in the tall man's direction. "I'd like you ladies to meet Henry Markoff, my boss here at the I.R.S."
Kerri took an instant dislike to Markoff. She had difficulty understanding why, but her instincts flashed a warning. She accepted his hand. "Hello," she said with a forced smile.
Markoff turned to Marsha. "Nice to see you again, Marsha. We're all very impressed by the work you're doing in the city these days."
"Thanks, Henry. It's very kind of you to say that." She pointed to the elevator door. "Shall we," she said.
All four moved to the elevator and took it to the top, then Markoff led them to his corner office, an clinically decorated space that exuded the atmosphere of a dental waiting room. Markoff pointed to a green and brown striped velour upholstered triple seat couch, several feet to the right of his glass-topped desk. "Please have a seat, ladies," he said, then took his own behind his desk without offering coffee, tea, water, or any other nicety. He nodded to Johnstone, signifying to him that it was time for him to sit, then glared at Kerri. "Allow me to begin this session by thanking you for stepping forward with your information, Miss King. We at the I.R.S. appreciate it. We've all grown tired of the hide and wink culture that has prevailed for decades. It's a cancer that feeds off of the honest taxpayers of this great nation, and I can assure you that we plan to bring it to an end, as soon as we can get the politicians to pass the necessary legislation."
Markoff's attention was diverted by a loud two-handed ovation by Marsha Cooper. She hated pontificators, and enjoyed bringing then down to size by cutting them off at the knees. "That's all very impressive, Henry, but I don't think my client is interested. We're here for a reason. I think you know what that is."
"All right, we'll get right to it...In view of the large amount of money involved in this case, we have expedited our review, and as a result, we plan to assess substantial penalties." Markoff lifted three sheets of paper from his desk and handed one to each of Kerri and Marsha. He removed his spectacles from his vest pocket, scanned the third, then looked up. "Thanks to the cooperation of the Geneva division of Iacardi & Sons, and the folks at Liechtensteinische Comco, we have assembled accurate records of your trading and banking activities over the past ten years. Miss King, the amounts you gave Niel were indeed accurate. As you can see on the sheet I've just given you, we intend to assess monetary penalties to Miss King for the following: failure to file, failure to pay, intentional disregard, failure to provide a tax shelter registration number, and compound interest on all unpaid taxes and penalties, all for a period of ten years. The amount owing as of the date of this writing is two hundred and thirty-eight million, five hundred and ninety-one thousand, two hundred and six dollars."
"I have questions," Marsha said, her expression a clear indication that she was not happy with Markoff's number.
"Sure," Markoff said.
"Did you treat Miss King's starting balance as tax paid capital?"
"No, we did not. We treated it as the fruits of crime. By her own admission, Miss King has acknowledged that the late Jim Servito stole the money from the Governments of Canada and the United States."
"We will be filing a Notice of Objection on that issue. If you check your records, you'll find that the Feds of both countries signed off on the fruits of Jim Servito's crimes. They did that in January of nineteen ninety-one when Kerri's father paid them five hundred million dollars...Next question. Did you take into consideration the fact that my client made a charitable donation of one hundred percent of her foreign holdings?"
"We did not. Until we have official and written confirmation that she has done that, we must assume that the money remains in the Swiss account."
"That item will also appear in our Notice of Objection. My client has indeed made that donation, and our submission will verify that fact. Furthermore, our submission will verify that the donation was a two thousand and one event, in which case her claim for a charitable deduction in the relevant year should be allowed."
"Very eloquent, Marsha. You get tougher every time we meet. Any more questions?"
"Sure there is. I was hoping I wouldn't have to ask it...My client walked into your office last month and bared her soul. She fed you a monumental tax liability on a silver platter, voluntarily. I presume you're planing to take a pass on criminal prosecution."
Markoff nodded. "You have my assurance. There will be no criminal prosecution."
Marsha tucked her sheet of paper into her briefcase, then stood. "Fine, then that should do it." She nodded to Markoff and Johnstone. "You'll hear from me very soon."
Markoff raised both of his hands. "Don't go yet. I have a question to ask Miss King." He frowned a Kerri. "Who, other than you and your attorney, knows about your foreign bank account?"
"My father, his wife, my father's lawyer in Toronto, and the officers at Liechtensteinische Comco. Why are you asking?"
"We received an anonymous telephone call recently. The caller, who refused to identify himself, told us that you have an account at the Geneva branch of Liechtensteinische Comco. He also told us the exact amount of money you have in that account. We drew two conclusions from that call: the first was that your secret bank account was no longer secret, the second was that someone wanted to hurt you by providing us with that information."
Markoff's revelation induced a simultaneous surge revulsion and hatred inside Kerri. It was obvious that Jeffrey Wheeler had delivered on his promise to inform the Feds of her Swiss account. She was relieved that she had nullified his ploy by stepping forward and volunteering the information, but frustrated that she could do nothing more about it. What worried her most was that she had distributed all of the money in the account and had nothing left with which to pay the taxes and penalties Markoff had just outlined. "I have reason to believe I know who was behind the call," she said.
"Who?" Markoff asked.
"Enerco Inc., a large company in Houston, has recently made an offer to purchase Iacardi. Because I'm the only shareholder refusing to sign the offer, I stand between acceptance and rejection. Jeffrey Wheeler, Enerco's vice-president, met me in New York recently. In that meeting he told me he knew I had a Swiss bank account, which bank it was in, and how much was in the account. He threatened to tell the Feds if I didn't sign their offer by the end of December. I can't prove it, but I think he obtained the information from Wilhelm Lentz, the Liechtensteinische officer with whom I made the arrangement to distribute the funds in my account. Lentz disappeared the same day of our meeting. He hasn't been seen since."
Markoff, a hardened veteran of the taxation wars, had a deep and abiding contempt for people who willfully deceive the I.R.S. He didn't see Kerri King as one of them. She was different, did not fit the mould. He wanted to pursue the subject of Enerco, but knew it was none of his business. His expression had changed as Kerri told her story. He smiled, something he rarely did in the presence of tax cheats. "Miss King, you are a unique individual. I have been with the I.R.S. for thirty-two years and have never seen a case or a taxpayer like you. Off the record and aside from your tax case, I want you to know that me and my entire family have been following your story ever since September eleventh. We applaud you. You are an inspiration to anyone who cares about people. Were it my decision, I would forgive you of all of your tax and penalty liabilities. Unfortunately, it's not my decision, and the law is the law." He turned to face Marsha and nodded. "File your Notice as quickly as you can. I'll do everything in my power to make sure your client is treated fairly."
Kerri and Marsha shared a taxi after leaving the I.R.S. building. Neither had discussed anything related to the meeting until Kerri turned to face her attorney. "That ended well, but it leaves me with a problem. I'm a little short of cash these days."
Marsha reached for Kerri's hand. "Leave that problem to me. I'm just getting started."