Today, the IRS is honoring John McDougal, a special trial attorney based in Richmond, Virginia, with a retirement ceremony in the grand foyer of its national office at 1111 Constitution Avenue in Washington, D.C. I cannot remember another person honored in this way who was not an executive in the organization. I also cannot imagine a more deserving person for the IRS to honor.
In January, 1980, I moved into the office adjacent to John’s in the Richmond District Counsel Office of IRS. How fortunate I was. For almost 30 years I had John as my next door neighbor or nearby neighbor at work. To have the opportunity to work next to the greatest attorney in all of Chief Counsel’s office certainly made me a better attorney.
Before recounting some of the amazing things John accomplished in his 43 years with Chief Counsel’s Office, I want to go back to the beginning of his tenure and talk about his sleep habits. John is a night owl. He does not stay up late to party but he has a bio rhythm that keeps him up into the wee hours of the morning and causes him to want to sleep into the later morning hours. Today, many employers accommodate personal preferences and rhythms of this type but in the 1970s the world was a much more rigid place.
The official hours of the Richmond office were 8:30 AM to 5:00 PM. In an effort to accommodate John’s schedule, the head of the Richmond office allowed employees to arrive by 9:00 AM before being charged with annual leave. Each morning when they arrived for work, the office secretaries would begin calling John’s home in an effort to wake him up so that he could arrive by 9:00 AM. On many days their efforts failed. John would arrive at 9:05 AM or later and get charged one hour of annual leave. He would then stay at the office and work each evening until 9, 10 or 11:00 PM; however, the office had no system of credit hours or comp time to accommodate this deviation from the official schedule and so John worked for several years with no ability to take a vacation because he used all of his leave time arriving late.
John, however, did not complain. Finally, in the 1980s the office evolved into a form of work flexibility that accommodated John’s bio rhythms and allowed him to take vacations. I tell this story in part because it is amazing in 2016 to imagine such a work world that would treat its most valued and hard- working employee in such a poor manner but also to make John human since John’s performance as an attorney and a colleague set such a high standard.
At his core, John is a great trial lawyer. He loves to put a case together and to present it. He has had many Tax Court trials over his career and taught trial practice skills at Chief Counsel and NITA programs. He does not, however, love cases involving huge corporations that might take years to develop, teams of lawyers to assemble and lots of national office coordination. He prefers fact intensive cases and especially fraud cases. To my knowledge, he is the only special trial attorney in the SBSE stovepipe of Chief Counsel’s office because that designation was reserved for attorneys in the LB&I stovepipe until one Chief Counsel, who had litigated against John before becoming the Chief Counsel, reached out and gave John that designation in recognition of his ability.
In the 1980s John was assigned to a pilot program with the Department of Justice (DOJ) to handle criminal tax cases as a Special Assistant United States Attorney. About eight attorneys from Chief Counsel offices around the country joined this program. I believe that John was the only one who actually tried criminal cases. During the 1980s and 1990s, he tried over 30 criminal cases while continuing to handle a heavy docket of Tax Court cases and advisory work in the office. This was made possible by his skill, his organization and his hard work.
He went on a special assignment to the Virgin Island tax authority for several months, he went on assignment to the Senate’s Permanent Sub-Committee on Investigations for over a year and he was assigned to assist the Tax Court in handling a disciplinary hearing.
He traveled to the federal prison in Allenwood to try the Tax Court fraud case of master spy Aldrich Ames. At the request of Washington District Counsel he tried the fraud case of Grossman v. Commissioner I discussed in a post recently. He picked up a large fraud case on transfer from me where he tried it and won it and then convinced DOJ to have a receiver appointed in Florida to manage the assets of the taxpayer who had hidden them in many far flung ways, including offshore, and he worked with the receiver for over a decade to collect income from and sell the properties. While working on that same case, he was stabbed and robbed late one night in Tampa but made it to work the following Monday where he showed his scar ala LBJ. He created the theory that fraud on the tax return by anyone should hold open the statute of limitations and fought hard with the national office to convince it of the correctness of his theory which we have discussed here.
There are many other highlights of his career but I want to focus on his crowning achievement. All of these special assignments together with his work in Tax Court and district court trials prepared him for his greatest assignment – working on the offshore credit card project and all that followed.
In 2000 when the IRS reorganized, all of the new divisions wanted John because of his reputation as a great attorney but he chose SBSE due to his desire for the types of cases it handled. At almost that same time Revenue Agent Joe West in New Jersey had figured out how to find taxpayers hiding their assets offshore by obtaining credit card records in the United States. John got paired to work with Joe and the world of taxpayers parking money offshore was turned upside down. Though John was by no means the sole force behind the IRS efforts to break through the world of secrecy and offshore parking of assets to avoid taxes, John was a major force in this effort. With the depth of knowledge he acquired earlier in his career and the penchant for hard work he always had, he played an important role for the past 16 years in changing the offshore landscape. Through his efforts the IRS has collected billions of dollars. It is hard to imagine an IRS attorney with greater impact over this time period than John.
As the IRS says farewell to a great attorney, I write to say thanks to a friend and colleague who taught me so much and who helped me in so many ways.