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
In evasion of payment prosecutions, the six-year statute of limitations runs from the last evasive act, not the older filing date of the return, according to the Fifth Circuit.
Seventh Circuit Holds That Untaken Deductions Cannot Be Used To Offset Tax Loss
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.
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
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
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
It is nearly an article of faith that, in negotiating a guilty plea to a Title 26 offense, the prosecutor and the CI agent working the case for the IRS will invariably agree to take into consideration in reaching a "tax loss" number for sentencing purposes a wide array of tax return considerations which effectively… Continue Reading