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White Collar Defense & Compliance Developments in Criminal Law, Federal Case Law and Statutory Developments

Sentencing Guidelines Amendment Would Allow Reduced Sentencing In Tax Cases By Applying Unclaimed Deductions To The Tax Loss

Posted in Tax prosecutions

Alain Leibman writes:

We have previously written about the varying sentencing treatment accorded untaken deductions –some courts of appeal have upheld the reduction of tax loss by application of deductions not originally taken on the taxpayer’s filed return (thereby reducing sentencing exposure) (see here), while others have rejected the practice (see here). 

An excellent recent post on this subject appears in Jack Townsend”s blog, Federal Tax Crimes.  In it, Mr. Townsend discusses a recent article by Steven Toscher and Dennis Perez in the Journal of Tax Practice and Procedure, concerning a proposed Sentencing Guidelines amendment intended to allow the consideration of previously unclaimed deductions. Defense counsel who represent taxpayers would be well advised both to familiarize themselves with the proposed change and to frequently review Mr. Townsend’s blog for the latest developments in the field.

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)