Unclaimed Credits, Deduction s, and Exemptions.—In determining the tax loss, the court should account for the standard deduction and personal and dependent exemptions to which the defendant was entitled. In addition, the court should account for any unclaimed credit, deduction, or exemption that is needed to ensure a reasonable estimate of the tax loss, but only to the extent that (A) the credit, deduction, or exemption was related to the tax offense and could have been claimed at the time the tax offense was committed; (B) the credit, deduction, or exemption is reasonably and practicably ascertainable; and (C) the defendant presents information to support the credit, deduction, or exemption sufficiently in advance of sentencing to provide an adequate opportunity to evaluate whether it has sufficient indicia of reliability to support its probable accuracy (see §6A1.3 (Resolution of Disputed Factors) (Policy Statement)).
However, the court shall not account for payments to third parties made in a manner that encouraged or facilitated a separate violation of law (e.g., "under the table" payments to employees or expenses incurred to obstruct justice).
The burden is on the defendant to establish any such credit, deduction, or exemption by a preponderance of the evidence. See §6A1.3, comment.Hat tip to Peter Hardy, here, for calling this development to my attention.
For past postings on this issue, see
- Principal Comments on Unclaimed Deductions and Losses in Sentencing Tax Loss Determinations (FTCB 3/16/13), here.
- Tax Conviction and Sentence Affirmed Under Unusual Circumstances (FTCB 12/3/12), here.
- Tax Due and Owing, Tax Loss, Restitution, Civil Tax (FTCB 5/23/12), here.
- Tenth Circuit Decision on Unclaimed Deductions for Sentencing Tax Loss Calculations (FTCB 8/16/11), here.