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Feds Sue Cohn For $7 Million in Back Taxes, Interest, Penalties

April 4, 1986

NEW YORK (AP) _ Roy M. Cohn, the lawyer who rose to fame at the side of the late Sen. Joseph McCarthy, owes nearly $7 million in back taxes, interest and penalties, the federal government charged Thursday.

The Justice Department, at the request of the Internal Revenue Service, filed civil suits against Cohn in New York City and in Bridgeport, Conn., to satisfy part of the debt by seizing a New York townhouse and a Greenwich home that Cohn allegedly owns through dummy companies.

Cohn has acknowledged owing $1.75 million in taxes dating back to 1959, according to the government’s court papers, but despite a series of agreements with the IRS since 1978 he has paid little of the debt. He has not conceded any liability for the interest and penalties.

The two suits also charged several of Cohn’s colleagues at the law firm of Saxe, Bacon, Bolan & Manley with helping him to conceal his assets from the IRS. It also accused the firm’s parent corporation, Saxe, Bacon & Bolan P.C., and several former members of the firm with aiding Cohn.

His law firm helped Cohn beat the tax collector by paying for most of his personal spending through a generous expense account, the government charged. The suits seek to make the fellow lawyers responsible for any tax debt that cannot be collected directly from Cohn.

″All of this nonsense on the part of the Internal Revenue Service has been going on for 17 years. They know very well that the law firm owns the house. They knew very well that I do not own the house,″ Cohn said Thursday night. ″... And to come along, because they think I’m not in good health, and try to hit me over the head - why, if Joe McCarthy had ever tried tactics like that, they would have screamed their heads off.″

While working in the early 1950s for the same U.S. attorney’s office that filed the suits against him Thursday, Cohn helped prosecute Julius and Ethel Rosenberg, who were put to death after being convicted of passing atomic secrets to the Soviet Union.

Cohn moved to the staff of the Senate committee where Sen. Joseph McCarthy was making accusations of Communist infiltration of the government.

He faced disbarment last year when a lawyers’ disciplinary committee found him guilty of misconduct. The matter was held up because Cohn was reported to be suffering from acute liver cancer.

U.S. Attorney Rudolph W. Giuliani said the IRS referred Cohn’s case to him three months ago and that prosecutors acted quickly to recover his assets, in part because of fears over his health.

Officials at the IRS refused to comment on why it took more than 20 years for the government to take legal action to collect some of Cohn’s tax debts.

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