In Memoriam: Martin D. Ginsburg

In Memoriam: Martin D. Ginsburg

by Jay Starkman, CPA

Martin D. Ginsburg died on June 27, 2010. He was reknown as the best tax lawyer in Washington and as husband of Justice Ruth Bader Ginsburg.

I met Marty Ginsburg only four times. I found him to be the finest and most brilliant lawyer ever to practice taxation and I have the proof: Marty never lost a case that he initiated.

When I was writing my book on tax history, Marty agreed to review a chapter dealing with the judicial system. He read the draft and made just one comment, “we do not have a shared vision of the Tax Court.” Then he went on to explain. In doing so, he quite unselfconsciously disclosed the reasons that made him one of the most sought-after tax lawyers in the country:

I never found the TC to be inappropriately pro-IRS or to decide more than occasionally a case or an issue for the Gov't that should have gone for the taxpayer. And just as often, it seemed to me, TC decided one for the taxpayer that might more reasonably have gone for IRS.

In this I rely on personal experience which, to be fair, may not be portable. 2008 is my 50th year in practice -- although a schoolteacher these past 30 years I continue to litigate actively, e.g., I received one TC opinion in 2007 and at year end had a second case pending decision -- and my first TC case was tried in 12/58. In the first couple of cases I assisted, thereafter I was regularly lead counsel. Of course most cases settled -- that was my definition of victory -- usually before trial but sometimes at or after; but of the few dozen I litigated to decision the TC held in my favor in all but 2 (none were reversed on appeal) and those 2 adverse holdings were reversed, one in the 2d Circuit, the other by the Supreme Court way back in 1963.

My point is not that I am a good courtroom advocate -- in fact, sad to say, I am nothing special -- but that I am careful to evaluate accurately the litigation strengths (and weaknesses) of my case and of the Gov't's case. Whether in the TC or the District Court or the Court of Federal Claims, I have never brought a first instance dispute to the tribunal unless I had fully developed both my litigation strategy and an informed expectation that I would win. Of course, in saying "would" and not merely "should" or "might," certainly I was relying on both the sense and fairness of the Court, and of course that is really my point.

It has been, for 50 years, and it is still my belief that winning cases -- good facts, good law, good preparation -- win in the Tax Court, as they win in other courts, and with respectably few exceptions the issues and cases that lose in the Tax Court meet a deserved fate. Certainly there are exceptions but they have not been of a number and nature to convince me to select an alternate forum. In sum, I truly believe that so many cases are decided against the taxpayer in the Tax Court, not because the TC is systemically biased, but because a high percentage of those cases should never have been brought to court.

Everyone who reads Tax Court cases will agree that a high percentage should never have been brought to court. That there was a man who won (or settled on favorable terms) every tax case he initiated sets a record that I doubt anyone ever has or ever will match. Subsequent correspondence clarified that it was cases which he initiated that he won, excluding cases where he was brought in later as co-counsel or as replacement counsel.

I know from experience what an incredible client advocate Marty was. I first met him in the mid-1970s when he was a partner at Weil, Gotshal & Manges in New York. New York State audited and assessed $250,000 additional tax against a commercial finance company that I worked for. Following a 1974 collapse in real estate, our company wound up owning many properties that we had helped finance. Each property was then separately incorporated to limit liability, but in preparing tax returns, these entities were ignored and the losses were deducted by the parent which paid all the expenses. This was not a problem on a federal consolidated return. Unfortunately, at that time, New York didn't allow consolidated returns and disallowed the losses.

We took the assessment to Marty, as everyone affectionately and respectfully called him even then. He proposed a unique strategy. The conversation went something like this:

MG: If this goes to New York Tax Court, we will lose because the court is a division of the Department of Revenue. They would never rule against the commissioner in a case like this. I'm chairman of a New York State Bar committee working on making the state Tax Court independent of the revenue department.

Us: What are the chances of that happening?

MG: Well, that depends on convincing Governor Hugh Carey to sign the legislation. Revenue Commissioner James Tulley was Carey's campaign treasurer. In order for Carey to sign, we must convince Tulley that giving up control over the Tax Court won't diminish his power. We need to delay this case from going to trial until after control of the Tax Court is transferred.

Settling this tax dispute had everything to do with politics. Eventually, Marty convinced New York to settle the $250,000 case for $50,000. This “Who is the taxpayer?” dispute would have been a difficult case for us to win in court, even with an independent Tax Court. I've been scratching my head for 35 years pondering how he managed such a significant concession by the state. I can only surmise that New York had limited resources and preferred to use them on easier cases that didn't involve a tax attorney with a major reputation.

Marty Ginsburg had a mentor: Theodore Tannenwald Jr., the Tax Court's most brilliant jurist. Judge Tannenwald graduated summa cum laude in political science and mathematics from Brown University in 1936, and received the Fay Diploma from Harvard Law School in 1939, which until 2009 was awarded to the graduate with the highest three-year average in his class. [Dean Elena Kagan initiated a pass/fail grading system, following similar implementations at Yale and Stanford. The school now awards the Fay Diploma based on Dean's Scholar Prizes and Latin honor awards.] He joined the then-small New York law firm of Weil, Gotshal & Manges as its sole tax associate, and became a full partner in 1947. He served in the Roosevelt and Truman administrations, and as foreign aid adviser to Presidents Kennedy and Johnson.

In 1958, Theodore Tannenwald hired Martin Ginsburg, thus doubling the size of Weil, Gotshal's tax department. Marty wrote that until President Johnson appointed Tannenwald judge on the United States Tax Court in 1965, “I enjoyed the best one-on-one professional education any young lawyer might hope for.”

Georgetown University students should know that they benefited from the legacy of Judge Theodore Tannenwald in Professor Ginsburg's lectures. For everyone else, there's the crib-sheet summary he shared with me on “good facts, good law, good preparation,” as well as careful, accurate evaluation of the litigation strengths and weaknesses of both sides, and most important: never bring a dispute before a tribunal without a fully developed litigation strategy and an informed expectation that you will win.

There won't be another Marty Ginsburg. His tax lectures revealed a Talmudic understanding of the code, which I've never experienced from anyone else. It's amazing how someone you met briefly only four times in over 30 years can influence you.

My condolences to the family. May his memory be a blessing.

Addendum: “By day, Marty Ginsburg was one of the nation's premier tax law professors and practitioners. By night, he was one of the nation's most innovative and accomplished amateur chefs.” The Supreme Court Historical Society has just published a book of his recipes, Chef Supreme: Martin Ginsburg. Read or listen to the story which aired on December 12, 2011 at NPR.org.

A recent book, Notorious RBG: The Life and Times of Ruth Bader Ginsburg, gave a delightful example of Marty Ginsburg's quick wit. School administrators were aghast at Marty's response to his son's crime: “Your son stole the elevator!” “How far could he take it?” Marty retorted.

Jay Starkman, CPA is a sole practitioner in Atlanta. This article was originally published in Tax Notes on July 12, 2010. Read more about Martin Ginsburg in Tax Notes and Paul Caron's TaxProf Blog.