1,300 airline pilots were accused of tax evasion and filing fraudulent returns.
– Case Description
1,300 airline pilots were accused of tax evasion and filing fraudulent returns. Five pilots were chosen to represent the entire group in trial, called Test Case Petitioners. The pilots faced possible criminal prosecution and bankruptcy, and tax debts which most would never be able to discharge or pay off in their lifetimes, leaving the debt to their estates. Their credit and reputations were destroyed. The two leading lawyers for the IRS, Sims and McWade, were given bonuses for their outstanding work in prosecuting the pilots. Jurisdiction: Hawaii, Washington, DC, Oregon, Arizona, Tax Court, California. The Tax Court ordered over a billion dollars in taxes and penalties. (Dixon v. Commissioner of the IRS; Arkansas Bar v. Sims, Oregon v. McWade, IRS Director of Practice v. Sims and McWade).
Minns was hired to handle the appeal. The IRS was found guilty of fraudulent conduct by the ninth circuit court of appeals. The pilots received hundreds of millions in refunds and an additional judgment against the government. The two lawyers for the IRS (Sims and McWade) were suspended indefinitely by the IRS director of practice. To date, these are the only two IRS lawyers suspended and disbarred for work done for the IRS in US history. This is also the largest test case petitioner reversal in US history. The pilots were exonerated.