Helped to fully computerize the IRS
Sheldon Cohen, a tax lawyer and certified public accountant who helped set up the first presidential blind trust, for Lyndon B. Johnson, and then helped fully computerize the IRS as Mr. Johnson’s commissioner of internal revenue, died Sept. 4 at a nursing home in Chevy Chase, Md. He was 91.
The cause was complications from congestive heart failure, said a grandson, Reuben Goetzl.
Mr. Cohen, a native Washingtonian and son of a Lithuanian-born shopkeeper, graduated first in his law-school class at George Washington University in 1952. He then joined a cadre of young lawyers at the Internal Revenue Service who drafted a massive overhaul of the federal income tax code.
His role shaping the new tax code, which took effect in 1954, vaulted him to prominence in the field of tax law. He soon left government work for private practice and was recruited to the politically connected firm of Arnold, Fortas and Porter. One of the partners, Mr. Johnson confidant and future U.S. Supreme Court Justice Abe Fortas, became Mr. Cohen’s mentor.
Shortly after President John F. Kennedy’s assassination in November 1963, Mr. Cohen said, he was headed to Friday-evening services at his synagogue when Mr. Fortas summoned his protege. Mr. Johnson, newly elevated from the vice presidency to the presidency, needed his business affairs put in order immediately.
The Johnsons had long owned a radio and television station in Austin. “I was the only one who wanted to sell the radio station on the basis that it was a terrible conflict,” Mr. Cohen said in an oral history with the Jewish Historical Society of Greater Washington. “Fortas looked at me and said, ‘He’ll kill ya.’ He agreed to set up a blind trust.”
Mr. Cohen had experience creating such trusts, which allow investors to maintain their assets but avoid the conflicts of interest that might arise through their daily management. The 1978 Ethics in Government Act made blind trusts the preferred vehicle for public officials who do not want to dispose of holdings that carry potential conflicts.
Mr. Cohen returned to the IRS in 1964 as chief counsel. Mr. Johnson named him commissioner the next year, a time when the agency was warily beginning to adopt computer technology for the processing of returns. Such mechanization, which allowed the agency to track each taxpayer with a number, stoked fears of government overreach. Mr. Cohen argued that the modernized system would more efficiently identify and discourage tax fraud.
When it came time to use the state-of-the-art IBM system, however, Mr. Cohen proceeded cautiously and ordered that tax returns be tabulated by computer and then checked by hand.
“I am not going to be the commissioner on whose watch the system fails,” he recalled thinking, according to what he told a publication of the American Bar Association. “So we did it both ways that first year, and the computers worked fine. So the next year we switched off.”
In 1972, Mr. Cohen was recruited to serve as the Democratic National Committee’s general counsel in the wake of Richard M. Nixon’s landslide re-election victory. He helped settle a civil case stemming from the break-in and bugging of DNC offices at the Watergate office complex by Nixon campaign operatives.
Sheldon Stanley Cohen was born in Washington on June 28, 1927. His first experience in finance, he said, was helping his father with deliveries at the family business, Potomac Butter and Egg.