Spies and Tax Court Judges

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Bob Kamman, our intrepid commenter in chief and occasional guest blogger, alerted me to the announcement last week of the retirement of Tax Court judge Joel Gerber.  Judge Gerber served on the Tax Court from 1984 until his retirement.  He has earned his retirement having worked in one capacity or another for the federal government for 55 years.  Since 2006 he has served as a senior judge on the Tax Court.  The recent announcement tells us he will no longer serve as a senior judge.  He is the only Tax Court judge who had been my boss.  I never tried a case before him and believe I only met him once at a reception.  Still, he presided over a case that my office tried which evokes special memories.


Before he became Judge Gerber, he was a chief counsel attorney.  He went straight from college to law school to Chief Counsel’s office, just as I did.  He started his career in Chief Counsel’s office as a trial attorney in Boston.  When he started, Chief Counsel’s office had a rule that prohibited attorneys from working in their home state.  His home state was Illinois. 

He must have excelled at trial work because he transferred to Atlanta as a Senior Trial Attorney for four years, before becoming the District Counsel in Nashville, Tennessee from 1976 to 1980.  As District Counsel, he would have headed up a group of about 6-10 attorneys who handled all of the Tax Court cases in Tennessee and provided all of the advisory work in that state to the IRS.  It is his next job that represents a remarkable leap.  He moved from District Counsel of a relatively small office to Deputy Chief Counsel – the highest non-political office in all of Chief Counsel.  This leap sits pretty far outside of the norm for a move within Chief Counsel’s Office.  He became my boss when the Chief Counsel resigned in 1983 and he became the Acting Chief Counsel for a year before being appointed by President Regan to the Tax Court.  When I refer to him as my boss, I reference his time as Acting Chief Counsel when he headed the office.  As a lowly trial attorney I was many levels below him and never had contact with him.

The case that evokes special memories of Judge Gerber involved the master spy of the latter half of the 20th century, Aldrich Ames.  For those unfamiliar with Mr. Ames, he worked for the CIA and specialized in the Soviet Union.  Although he made a government employee’s salary, Mr. Ames drove expensive cars, lived in a nice house in a tony neighborhood and in other ways lived a lifestyle inconsistent with the earnings of a government employee.  Eventually, the sharp eyes at the CIA noticed the discrepancy between the pay and the lifestyle, did some probing and determined that he moonlighted as a spy giving information about US operatives around the world to the Soviet Union in return for cash.  The Soviets failed to issue him 1099s for these payments and he forgot to report them on his tax returns.  The Tax Court case concerned the tax on the unreported income from his moonlighting enterprise.

Before Mr. Ames filed his Tax Court petition, he had already moved to Allenwood, Pennsylvania where the government provided him with free housing for life.  The government prosecuted him for spying but included a count of conspiracy to defraud the IRS under 18 U.S.C. § 371 in the charges because, like Al Capone, this charge was solid and essentially took the guesswork out of whether he would be convicted.  When he worked at the CIA, Mr. Ames lived in Northern Virginia.  Because the Richmond District Counsel’s Office handled criminal cases for the entire state of Virginia, we were involved in the development of the criminal case against him.  Before the IRS sends a notice of deficiency pursuing additional tax assessments, it lets the criminal case run its course.  In this instance one result of the criminal case was the forfeiture of everything that Mr. Ames owned.  So, the notice of deficiency had little chance of resulting in payment or making any difference to the lifestyle of Mr. Ames.

I think the only reason Mr. Ames filed a Tax Court petition was a hope that it might allow him to leave the prison for the trial of the case.  No one wanted that to happen.  The prison officials did not want to send him outside the prison walls.  I did not get the impression that the Tax Court was excited at the prospect of hosting him in its building.  As a result, a special trial session occurred in Allenwood penitentiary.  Because few Tax Court trials take place in maximum security prisons, the case had a certain specialness for this reason alone. 

Judge Gerber presided over the trial and wrote the opinion linked above.  At the time of trial, I was the District Counsel in Richmond.  I cannot remember why I did not attend the trial but I sent John McDougal to assist the attorney assigned to the case. It did not come as a surprise that the IRS won the case even though the victory may not have brought funds into the government coffers.  Still, you do not want to lose such a case.

I am sure that Judge Gerber must have tried many interesting cases during his lengthy tenure on the Tax Court.  This one has always been special to me.


  1. Thanks Keith for sharing. I have periodically used the Ames Tax Court opinion as a colorful vehicle for teaching about constructive income. Ames unsuccessfully attempted to use the CI doctrine as a sword, arguing that the proper year for inclusion was 1985, when he entered into the agreement with the Soviets to betray the US, a few years before he actually got his about $1M in cash over a four year period in the late 80’s. (His CIA salary was about $70k/year). The opinion describes the exchanges, with signal sites and dead drops

  2. Kenneth H. Ryesky says

    “I think the only reason Mr. Ames filed a Tax Court petition was a hope that it might allow him to leave the prison for the trial of the case.”

    Other inmates have successfully used the tax court as a ploy to get a temporary change of scenery (if that is how success is measured). Gary Frederick Ayers’s tax assessment was on the unreported income of $78,153 from two bank robberies in 1972. Unlike Aldrich Ames, Ayers did not file his tax return for the year at issue.

    Gary Frederick Ayers v. Commissioner, T.C. Memo. 1978-341


    “I come along for the ride, only. I’m in a United States penitentiary doing 25 years. When I finish that, I go to Nevada to do a life sentence. All I wanted to do was come up here for a ride. What that man says is exactly true. Now, it’s back to you, friend.”

    [He was released from the Federal prison system on 9 March 1993, and the Nevada Department of Corrections lookup utility lists him as having been released.]

  3. Jerry Borison says

    I have a totally different kind of positive experiences with Judge Gerber. One of my best friends in the late 70’s was Mike Chitwood. Mike was quadriplegic as the result of a motorcycle accident when he was 15. Amazingly, Mike finished high school, college and law school. I met Mike when we were both in District Counsel’s office in San Francisco. At first, I was a bit uncomfortable with Mike, having never been with anyone so seriously handicapped. But eventually we became best of friends. I learned that Mike got his start in Counsel’s office because Judge Gerber, who was District Counsel in Nashville, Tennessee from 1976 to 1980, interviewed him out of Vanderbilt and helped make it happen. They stayed friends until Mike’s death and Joel was a frequent sounding board for Mike as he sought to overcome his physical issues while performing at a high level. The judge and I became friends, more correctly good acquaintances, after Mike died in a car accident. Mike thought the world of Joel. I do also. I wish Joel and his wife Judy the best in his retirement.

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