Tom Zehnle comments on his recent victory in the U.S. District Court for the Southern District of Ohio, Western Division. The original indictment centered on the marketing and implementation of sale-leaseback of tenant improvements strategy transactions (SLOTS) by the defendants.
"The whole thrust was about deception, misleading the IRS regarding the particular tax structures," said Zehnle, who successfully defended Jon Flask, one of the defendants. "It was basically no different than any other sale and leaseback. It’s just that the assets were unique. That's why the IRS said this was too much. It said they were hiding the fact that at the end of the day they were going to sell to another company and take their own loss."
"Criminal prosecutions tend to discourage people from thinking about minimization strategies," Zehnle noted. "The jury decision in my case might be a sign that there is a real difficulty in prosecuting these sophisticated tax shelters."