Innocent Spouse (11 page)

When he covered Watergate, Bob had had his own moment under the IRS thumb. Both he and his partner, Carl Bernstein, were audited.

“Are you kidding?” I said. “They’d see me the way the IRS sees me, and that’s not very flattering.”

“How many women in Washington are single parents?” Elsa said. “How many women in Washington are raising boys by themselves? Women jurors would be on your side. You’re more sympathetic than you realize.”

“I don’t know,” I said. “I don’t know if I have the stomach to have our dirty laundry washed in a courtroom. The government lawyers would turn our world inside out and upside down. Read what the agent on my case wrote about me. That’s the approach they’d take. They’d hold me up as the poster child for selfish indulgence.”

Bob was the only person I trusted to read Deborah Martin’s IRS report. I figured with his experience as an investigative reporter there wasn’t anything he’d see that would shock him. He would not make assumptions about Howard or me. He would look at the facts and weigh them. And, above all, he would be discreet.

Bob got back to me quickly. “I’m sending this report over to Sheldon Cohen. He’s my tax lawyer. I first went to him during Watergate, when Nixon had the IRS audit me. I’ve been with him ever since. He’s good. He used to be the commissioner of the IRS. You’ll like him. Call him in two weeks.”

He gave me Sheldon’s number and two weeks later, to the day if not the hour, I called him. His voice was calm and assured. His tone was warm. “You’re in quite a jam, aren’t you? Why don’t you come by and see me?” Sheldon was a partner at Morgan, Lewis, and Bockius, where he headed the tax law department. He was one of the sharpest, most respected tax lawyers in the country. I thanked my good fortune that he would see me.

The law firm’s offices were about five blocks from the White House. The building was in the hub of the “old” downtown. The meeting was utterly different from my first go-round a few months earlier at Caplin and Drysdale. For one thing, I skipped the elegant suit and the rest of it. Instead I dressed as I usually did, as Spencer’s mom. There was one item I added to my plain shift dress: a pasta and bead necklace Spencer had made in art class.

Rather than being led to an austere conference room, I was ushered into Sheldon’s corner office. It wasn’t grand but it was comfortable. He got up from his desk to greet me, inviting me to sit on the sofa. Sheldon sat in the adjacent chair with the window behind him. “I grew up in Washington,” he said. “My father was in the wholesale food business.” Sheldon had an accent that is unique to the Washington-Baltimore area—not quite southern and not quite northern, with a dose of the Maryland shore. “I know about the food business,” he said, “how restaurants operate. What your husband did goes on in that business sometimes.” His tone was warm and sympathetic. I no longer felt that I was already on trial and staring a guilty verdict in the face.

“I don’t have a clue what Howard was up to,” I said. “He didn’t include me in his business affairs.”

“Well, that’s not unusual. It’s not unusual for a wife to be unaware of such things. It happens,” he said.

“How did my husband get in this mess?”

“I don’t know for sure because I have only the IRS report, but I would imagine he got a little greedy. It seems he ran the books the
old-school way—out of his back pocket. That was fine until the tax law changed a couple of years ago. Businessmen couldn’t write off all those meals and martinis, and that hit the restaurant business hard. That’s when he should have cleaned up his act, because the IRS started looking precisely at small business operators like him.” The IRS knew restaurant profits dropped because of the changes in the law; therefore the income of their owners had to drop, too. But restaurant owners, like everybody else, don’t enjoy seeing their incomes drop. “All that cash looks so tempting and readily available. In a nutshell, Howard opted to break the law to keep his personal cash flow robust.

“You have a couple of problems here,” he continued. “There’s the unreported income, that’s one thing. But what really gets under their skin is not paying the withholding taxes, especially since he was taking the money from the employees and using it for his own purposes.”

A woman charged into the room. “I’m sorry I’m late,” she said, coming to a full stop in the middle of the room. She was slight, with short blond hair, modest jewelry, wearing a trim tan pantsuit, and smiling. She was much younger than Sheldon but, like him, all business.

“Let me introduce you to Miriam Fisher,” Sheldon said. “She works with me. I asked her to take a look at the report. I wanted her to be in here with us.” We shook hands.

“Bob and Elsa think I should go to court and fight,” I said. Sheldon smiled.

“There are many things Bob is smart about,” Sheldon said, “but he’s not a tax lawyer. That’s why he has me. It would be wrong for you to go to court. You could lose. This is not an example of the IRS being mean-spirited or wrong. In this case the IRS was doing their job. They got the evidence and they got their man.”

Miriam paced back and forth and then perched herself at the edge of Sheldon’s desk. “Even with the atmosphere as it is right now on Capitol Hill,” she said, “where everyone is down on the IRS, where everyone is crying for reform, this would stand as an example of the IRS behaving properly.”

So the IRS was right about Howard. Would they see me the same way? I didn’t care about court. What I cared about was survival.

“This is what I’m afraid of,” I said. “If I settle with the IRS, if I sell what we have, my son and I will have nothing. If I lose the restaurant,
too, we’ll be in a very bad way. It supports us. When I went to work at CNN they agreed to let me work part-time and, because I was subsidized by Howard, I accepted a part-timer’s salary. I try very hard to be a full-time mother. My savings are nil. I’m getting a salary from Nathans but I’m having to use money from Howard’s estate to make ends meet. I know that’s money the IRS wants but it’s all we have. The situation is spiraling out of control. Every day we have less—and we didn’t do the crime.”

“I know it looks bad to you,” Miriam said, “but I read the report and I see a lot of opportunity.”

Miriam resumed pacing. She tossed out ideas that had to do with the ins and outs of tax law and asked me a lot of questions. She wanted to know about my work, my involvement with Nathans, to what extent I’d been involved in the business, if at all. I tried my best to answer, but any tax questions were over my head. I was mesmerized by her, though. Even when she didn’t talk she was still in motion. She was younger than me but that wasn’t a divide. Miriam and Sheldon traded ideas in the language of the law, but then they’d turn to me and try to explain. They didn’t talk down to me. They were struggling to find a solution to my crisis. I watched and listened. Even though I didn’t understand all of what they were saying I was overwhelmed. Tears filled my eyes. I couldn’t help it. I was so grateful. Sheldon and Miriam were compassionate; they gave me hope, and the more hope they gave me, the more relief I felt, and with the relief came the tears.

Sheldon leaned forward in his chair, resting his arms on his knees, hands clasped in front. “I think you have a colorable argument for innocent spouse,” he said. It was the first time he had uttered those words of hope that I was clinging to.

I told them that innocent spouse had come up at Caplin and Drysdale. “That’s the first I’d ever heard of it. But they said I didn’t stand a chance.”

“I disagree,” Sheldon said. “I think you do have a chance, and I should know because I wrote the innocent spouse code when I was commissioner.” He gave me a brief history of the code, which was written specifically to protect a widow who was unaware of her husband’s tax fraud. In that case the woman didn’t know her husband had
another family and that he was using his income to support them, too, but not paying taxes. When he died, the whole mess landed on her.

“Sheldon, are you sure?” I asked. I was afraid to get my hopes up too high.

“We have to learn a lot more about you. We have to prepare a defense. We’re going to have to fight for it. But we will fight.”

“When I tell you I knew nothing about this, really nothing, I’m telling you the truth. I had no idea this was going on,” I said, looking from Sheldon to Miriam and back to Sheldon. “I know I signed the tax forms. That’s my signature and I remember signing them. I just assumed if an accountant prepared them they were okay. It never occurred to me to question them. I don’t think I even looked at them.”

“It happens all the time,” he said. “Wives never read the documents; they just sign them. My wife used to be like that, but I told her she ought to start reading what she signs. You should too, from now on.”

“You know,” I said, “financially we led separate lives. I wasn’t involved in his business. I never saw his books. We had separate checking accounts, separate credit cards. Howard paid almost all the bills, and that was fine with me. I liked it.”

“Did you take money from the business?” Miriam asked.

“Not really.” I paused. “Well, I guess, sure. Sometimes I would need some cash and Howard would tell me to ask the bartender. I didn’t question it.”

“Were these large amounts of money?”

“No. A hundred dollars here or there and
very
infrequently, months apart, and this was several years ago, when I wasn’t working. I assumed it was our money.”

“That’s okay. There was no reason for you not to think that,” Sheldon said. “What they look for is a pattern of abuse, of regularly taking money, of knowing you are living off ill-gotten gains.” On that score I knew I was clean.

I jumped ahead. “Can I switch law firms from Caplin and Drysdale?”

“Yes, you can,” Sheldon said.

“I feel like a criminal there.”

Sheldon folded his hands. “On their behalf, I would say this: They
were used to working with Howard. He’d been with them for months. He was the client. He was the one who did it. And then you walk in the door. Suddenly they have a new client but the same old case. It’s not easy to change gears like that.”

“Innocent spouse is a tough code,” Miriam said, “but it’s changing. It’s being debated on Capitol Hill at this very moment. There is a move to liberalize the interpretation of innocent spouse and I think it will happen. You could benefit from that. Your timing couldn’t be better.”

“Innocent spouse has been granted thousands of times,” Sheldon said, “but it’s not given away. It doesn’t work most of the time because the wife knows the income isn’t being reported or she participated in the business. She’s involved. In that case, no dice.”

Sheldon paused then leaned forward in his chair. “If you come to us with the case, this is what we will do,” he said. “I will build a wall around you and Spencer and try to save the two of you. The business won’t matter. After we save the two of you, then we’ll decide whether we want to save the business. But the first fight is to save you and your son.”

I had one final question. “How do I pay you?”

Miriam explained the money could legitimately come out of Howard’s estate and Nathans. If I won innocent spouse, that arrangement would hold. If I didn’t, all bets were off.

The next day I called Sheldon and said, “I want you to represent me.” Caplin and Drysdale were understanding about my decision. Now, with Sheldon and Miriam on my side, I was ready to fight.

I
N LATE
M
AY
, Washington was postcard beautiful. The whole town came alive, and I did, too, because for the moment the IRS was not hitting me right between the eyes. The case was in transition from one law firm to the other, and Sheldon Cohen and Miriam Fisher were getting current. Deborah Martin at the IRS agreed to stand down until they were ready. The white and pink dogwood blossoms sat delicately on their leafy branches. I ran hard each morning, skirting the Potomac River, passing below the Watergate apartments and the Kennedy Center, up and around the Lincoln Memorial. Sometimes I stopped at the Vietnam Veterans Memorial to touch a few of the fifty-eight thousand names of the dead inscribed on the black granite wall that rises from the earth as if pushed up by some elemental force of nature. It may be the simplest monument in this city full of monuments, but its simplicity is stunningly beautiful and very moving.

I shuttled between home and the restaurant in Georgetown and the CNN building near the Capitol on the other side of town. Driving a car had never been part of my routine. My father discouraged me early on when he sat fretting and stewing beside me in the front seat, until I pulled over, got out, and said, “Here, you drive.” Howard always drove—always—and I was always the passenger. In too many ways, I was the passenger. But now the car was my sanctuary. I listened to music. Listened to my thoughts. And when I needed to, I cried. Sometimes at a stoplight the driver in the next lane would notice me, blubbering at the wheel. If it was a good enough cry I arrived at my next destination—home, school, restaurant, show, lawyers—refreshed and ready to move on.

I asked Martha, “Do you cry?”

“Yes,” she said.

“Where do you cry most often?”

“In the car,” she said.

After Howard died, Martha and I spent a lot of time together. It was odd that Howard and I had been together for twenty years and only now were Martha and I getting to know each other. Howard loved her, as he did his parents, calling on their birthdays and on holidays, but we saw them rarely. Howard wanted it that way. Now I think he was afraid of what they might tell me about him. I had to push for more frequent visits. When Spencer was born we got together with Martha more often, but by then Howard’s father was dead and his mother was lost to Alzheimer’s. The visits would usually be at the family home in Alexandria, or later in Delaware, after Howard and Martha had moved Mrs. Joynt there so she could be closer to the home Martha shared with Vijay in New Castle. They had one son, Zal, who was at Vanderbilt. But only now did Martha and I have time alone together. The more I looked at her—across my kitchen table, or across booth 26 at Nathans—the more I saw Howard’s face in hers, the same brown eyes, the same white hair. She was trim and fit, a dedicated rower.