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

Category Archives: Tax prosecutions

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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… Continue Reading

Tax Loss Calculation May Be Reduced By Unclaimed Deductions Related To Unreported Income

Posted in Tax prosecutions

A taxpayer who fails to report income is usually charged with, and faces a potential jail sentence based on, the tax loss calculated on the omitted gross income, without regard to any offsetting deductions. For example, a car wash owner who takes in, but does not entirely report, his cash proceeds, faces a sentence based on the amount of that omitted income; he may also have incurred deductible salary expenses when paying his employees with cash and so could arguably reduce the income amount and thereby reduce his exposure to jail. The Tenth Circuit recently held that a sentencing court has the discretion to offset the income, and therefore lower the critical tax loss computation, by the deductible expenses related to the unreported receipts.

Willful Blindness Charge Available In Tax Cases To Prove Knowledge Of A Legal Duty

Posted in Tax prosecutions

A recent post discussed the Third Circuit opinion in United States v. Stadtmauer, 2010 WL 3504321 (3d Cir., Sept. 9, 2010) in the context of its approval of the practice of prosecution witnesses opining about the guilty knowledge of other participants in concerted activity. In addition, the court also addressed another interesting topic, the availability to the government… Continue Reading

Taxpayer Bears “Extremely Low Threshold” To Obtain Jury Instruction Concerning His Good Faith Reliance On Advice Of Tax Preparer

Posted in Tax prosecutions

It can be crucial in successfully defending tax evasion and false subscribing charges to obtain a jury charge to the effect that the defendant-taxpayer relied in connection with a particular tax return or return line-item entry on the advice provided by a tax preparer. A recent Eleventh Circuit opinion emphasizes just how minimal a trial… Continue Reading

Admission by government of absence-of-record certificates now unconstitutional

Posted in Constitutional law, Tax prosecutions

The Supreme Court last week applied a newly-invigorated Confrontation Clause to deny the admission at trial of drug lab test certificates in an opinion which may unintentionally prove very useful to attorneys defending criminal tax cases. In Melendez-Diaz v. Massachusetts, 2009 U.S. LEXIS 4734 (June, 25, 2009), the Court unremarkably extended the reach of Crawford… Continue Reading