Finance - HL 132 (1)

From: Jim Horan

Date: 6/14/2012 2:52:40 PM

To: 'Mark Sztanyo'

Subject: Another Finance Item

Hi Mark:

 I emailed Merrily Probst Whalen and inquired if she would be interested in representing the pilots in pursuing their case against the IRS in Federal Court.

Her very honest reply is below. As she said, unless we had someone outside the audit (Delta or ALPA) to help us out, we basically have no chance.

 Does anyone else in our group have any ideas?

 Best,

Jim

Jim Horan

P.O. Box 7480

2165B Saddle Ridge Loop

Avon, CO 81620

970-845-7922

From: Merrily Whalen [mailto:Merrily3@cox.net]
Sent: Thursday, June 14, 2012 12:25 PM
To: 'Jim Horan'
Subject: RE: Inquiry

Jim,

Thank you for your kind thoughts of my abilities to refer others to me. If I thought the 843 issue could be won at this point I would accept, however, the position the IRS has taken is that they are going to fight it out in court. There are never any winners in a court action . . . especially against someone with deep pockets (that extend into yours). A lawsuit would be very expensive and maybe as much as the original fee you all paid Bill. Without the cooperation of someone outside the audit (Delta or the union) the argument the IRS makes has case law on their side. The ONLY way this case can be won is if it can successfully be argued that this was in fact a payment for a ‘breach of contract.’ That is actually what it was, but with a bankruptcy involved it becomes a ‘grey’ area. The IRS will not even allow the 843 claims to those guys who got their 1040X refunds. To top it off, and what bothers me is that the IRS drafted the new 2012 IRA legislation to treat the payments from airlines in bankruptcy the way they outlined gives their “intent” argument mountains of validity. They are re-writing and shoring up their argument. You have to realize that there are potentially millions of dollars of refunds of claims involved. Do the math. This is what got their attention and you know our government is bankrupt and what chance do you think there will be to get those funds if they don’t want to pay them?

 I physically could not handle going forward at this point. I am a one-person practice and without Bill’s help and his handling the lawsuit I am unqualified to go forward. He finished law school but never practiced but knows all the filings, etc. I could coordinate the whole case for someone else but not able to go solo. Also, I am not a CPA, Bill used to be but not any longer. I hope you understand my position and why I have tried so hard to get these cases resolved on the field level. I can only keep trying to help the ones still open in hopes that the IRS person has not got the “word” from their #1 attorney.

Your friendship has been appreciated and thanks again,

Merrily

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From: Jim Horan [mailto:Vailmtneer@comcast.net]
Sent: Wednesday, June 13, 2012 1:01 PM
To: merrily3@cox.net
Subject: Inquiry

 Hi Merrily:

Your email to me which I forwarded on to the Pilot Communication Network (with your permission) has not been published yet, but I have already received one phone call (from a former Western pilot who was successful with the 1040X but not the 843).

Here’s the inquiry: Would you be willing to undertake the huge task of representing the pilots who have been denied either or both filings with the IRS?

I know a fee schedule would have to be worked out and a lot of other details, but I am sure this question is going to be bantered about by a lot of pilots. Specifically, who is qualified to take on this task. I believe with your IRS experience and being certified as a CPA certainly makes you a prime candidate.

That question has not come up yet (meaning who is qualified) but I thought I would run it by you. I know you have archived a lot of email from pilots who sought Bill’s representation. So at least you have a data base of some of those pilots.

Let me know your thoughts.

 Jim

Jim Horan

P.O. Box 7480

2165B Saddle Ridge Loop

Avon, CO 81620

970-845-7922 (H)

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