A recent court decision ruled that a CPA’s failure to file and pay his taxes couldn’t be used against him in an unrelated tax shelter case.

The CPA in question, Robert Nagy, was originally tried in a district court for his participation in a tax shelter scheme, and found liable for $2.6 million in penalties. During the course of trial, evidence was admitted that Nagy had not timely filed and paid his taxes. On review, the Fourth Circuit decided that that was inadmissible character evidence, and overturned the penalties.

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