Tax 'Issues' For Sotomayor?

There is some question as to if Sotomayor may have some tax 'issue' about to bubble to the surface. Sotomayor had a private law office she named "Sotomayor & Associates", but there were no associates. There is nothing illegal about adding "& Associates" even though it is just one person, but it does seem to be misleading. There is also some question as to why she would even have a private law practice.

http://corner.nationalreview.com/post/?q=ZTQ4YTM5MTk4YjI1YjA2NTI4YzIyMTQ1YmMyNjcxZGY= (hat tip to http://pajamasmedia.com/instapundit/81507)

"the New York Times report yesterday on the strange matter of Sonia Sotomayor's sideline job from 1983-86, when she was a young district attorney and, later, law firm associate. It turns out she ran her own private law office, which she called "Sotomayor & Associates" even though there were no associates — there was just Sotomayor.

This seems odd. When you're a prosecutor, your client is the public and you're really not supposed to be taking on private clients who may have conflicts-of-interest with the public. Exceptions are made for providing finite legal help for family or friends (e.g., helping your mother draft a will) — after all, those things don't usually entail much compensation and the prosecutor is conflicted with respect to family and friends anyway (i.e., if mom gets indicted, you don't get the case — they find another prosecutor to take it).

Furthermore, law firms frown on their associates running on-the-side legal practices. Leaving aside whether income the lawyer earns should be going through the firm, good law firms set up systems to check for conflicts-of-interest: whenever new business comes in the door, the firm does a conflicts check to make sure the prospective client isn't in an adversarial posture as to a current client to whom the firm already owes professional fealty."

The obvious question then becomes why she set up the law firm. Was it a tax dodge (http://taxprof.typepad.com/taxprof_blog/2009/07/judge-sotomayors-law-practice-a-tax-dodge.html)? Glenn Reynolds opines "When you see a business arrangement that doesn’t seem to make any sense, just say “it’s probably for tax reasons,” and you’ll be right nine times out of ten." (http://pajamasmedia.com/instapundit/81555).

Assuming that to be the case, the final question is if Sotomayor has a tax problem (http://pajamasmedia.com/instapundit/81564 and http://taxprof.typepad.com/taxprof_blog/2009/07/does-judge-sotomayor-have-a-tax-problem-.html). The answer as of now appears to be a very unsatisfying maybe. There is not enough information to determine how serious, if at all, this is. That said, this will almost certainly come up during her confirmation hearings and could be one of the significant non-race related issues the Republicans raise.

More thoughts on the naming issue at http://www.newyorkpersonalinjuryattorneyblog.com/2009/07/sotomayor-offers-lousy-defense-to.html.

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