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NO END ZONE DANCE FOR CLASS ACTION LAWYER

December 01, 2006

Lanny Vines has had his ups and downs. He made a fortune as a class action lawyer. He then lost a fortune - $25 million - when he tried his hand at day-trading.

Mr. Vines was able to deduct his day trading losses thanks to a Tax Court victory that is the tax equivalent to winning a football game in the last minute with an onside kick and a two-point conversion. He got the court to agree that the IRS abused its powers by not letting him file a late election to be treated as a trader.

Yesterday the Tax Court shot down his attempt to do the tax equivalent of an end-zone dance. The court ruled that Mr. Vines could not make the IRS pay his legal fees for his Tax Court case.

Still, Mr. Vines has let us know where he stands on an important issue. We expect him to be a good sport next time he loses one of his class-actions by offering to pay the other side's legal bills.

The TaxProf has more.

Link: Vines, T.C. Memo. 2006-258

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