Sandra Eve Kardos
CERTIFIED PUBLIC ACCOUNTANT

cyan.gif (863 bytes)added 9-11-98

Comparison between Martin, Field and Kardos-Weiss Fees

This is a position paper showing the savings in actual costs to the partners for their defense before the IRS and the State. This supports why    Kardos-Weiss was a better deal instead of the TFP recommendation of Don Field or Robert Martin.

We are basing Field's pricing on an October 1, 1984 letter  sent by TFP on October 19, 1984 to each partner. The letter announced that Field was the only person authorized by TFP to spend the Legal Defense Trust Fund (TFP created from your money), and to represent the individual partners. Field and Martin were paid approximately $400,000 from the TFP Defense Trust. We received the balance of that fund of about $30,000.

The data  shows that the net cost to the partners using the Kardos-Weiss team was about 1.3 percent of what Field (next lowest cost) had quoted. $635,000 compared to $18,021,250.

Savings by using Kardos-Weiss compared to  Martin or Field.

The defense by the Kardos-Weiss team cost the partners $141,000 at sign up and if every partner had a 90 Day letter 1900 at $260 = $494,000.   $141,000 + $464,000 = $635,000.

Martin’s proposed fees would have cost the Partners $47,075,000. This is a net saving to the partners of $46,440,000.

Field's proposed fees would have cost the Partners $18,021,250. This is a net saving to the partners of $17,386,250.

Had the TEFRA petitions not been answered, the Partners would have been assessed by IRS an additional 2 BILLION dollars!

Rucker's argument that we should have returned the money to the partners clearly shows the partners would have paid 75 times as much to retain Martin and 29 times as much if they retained Fields, even if the entire $1,200,000 had  been returned to the partners.

Basis of calculations

About 1900 partners invested $25 million at a 9 to 1 ratio.

This created about $225,000,000 in tax deductions. The average tax rate for 1982 was 50%. This creates a tax deficiency to the partners of $112,500,000. Penalty is 5% + 20% + 50% of interest due about $51,250,000.

Martin’s Fee Calculations for Partners

1900 $250 at signing

$475,000
1900 $250 at 30 day letter

$475,000
2% $112,500,000

$2,250,000
2% $51,250,000

$1,025,000
1900 $250 at 90 Day

$475,000
1900 $1250 at 90 Day

$2,375,000
Total Cost

$7,075,000

Note,  this does not include fees for the state or TEFRA partnerships.

For the partnership petitions, the proposed deficiency was $1,200,000,000 + about $800,000,000 in penalties. Martin’s fee, based on 2% would be $40,000,000.

Martin's fees would have totaled $47,075,000 to the partners and partnerships.

Field's Fee Calculations for Partners

See Letter Sent from Don Field, Jr. to Partners in the Aardvark Partnerships Asking to be Retained to Defend the Partners

1900 $100 at signing

$190,000
1900 $400 at 30 day letter

$760,000
1.25% $112,500,000

$1,406,250
1900 $100 at 90 Day

$190,000
1900 $250 for California

$475,000
Total Cost

$3,021,250

For the partnership petitions, the proposed deficiency was $1,200,000,000. Field's fee, based on 1.25% would be $15,000,000.

Field's fees would have totaled $18,021,250 to the partners and partnerships.

Client specific issues on petitions

Field charged a fee for separate issues not related to TFP.

Sandra Kardos CPA and attorney Walter Weiss also charged partners for separate issues. Over 15 years this totaled about $300,000. It is impossible to determine how much Field would have charged for these separate issues. Since his fees for the petitions were at least twice as much as Kardos-Weiss, one would assume his fees for individual issues would have exceeded Kardos-Weiss fees for the same issues.

To the Sandra Eve Kardos CPA TFP page
Or E-mail Sandra Eve Kardos CPA