1. Evasion of Assessment. If the evasion conduct (which may include relevant conduct to the count of conviction) is to evade assessment of the tax, then only the tax is included in the tax loss calculation.
2. Evasion of Payment. If the evasion conduct (which may include relevant conduct to the count of conviction) is to evade collection, then tax, penalties and penalties sought to be evaded are included.In the linked blog entry, I said that the Seventh Circuit confused these rules for two reasons -- (i) where fraudulent checks were submitted to pay amounts that included tax, penalties and interest, the object of the offense included tax, penalties and interest and (ii) evasion of payment was relevant conduct to the crime of tax obstruction.
In United States v. John Cote (2d Cir. 2015) unpublished per curiam, here, Cote was convicted "after jury trial, of one count of conspiracy to commit tax evasion, in violation of 18 U.S.C. § 371, and four counts of tax evasion, in violation of 26 U.S.C. § 7201." As articulated in the quote, the conspiracy was an offense conspiracy rather than a defraud / Klein conspiracy. However, according to the DOJ Tax Press Release on the Conviction here, the conspiracy was a defraud / Klein conspiracy. There are important differences between an offense conspiracy and a defraud / Klein conspiracy, although they are punishable under the same statute, but those differences are not important for this blog entry. Focusing on the tax loss, the Court said
Cote raises a substantial question as to whether the district court erred in considering interest and penalties when calculating the "tax loss" amount resulting from his conviction for tax evasion conspiracy under 18 U.S.C. § 371, where the relevant commentary provides that "[t]he tax loss does not include interest or penalties, except in willful evasion of payment cases under 26 U.S.C. 7201 and willful failure to pay cases under 26 U.S.C. 7203." U.S.S.G. § 2T1.1, Application Note 1. However, because the district court unambiguously stated that it would have imposed the same sentence were Cote to prevail on his interpretation of the Guidelines, any error in calculating the Guidelines sentencing range was harmless. See United States v. Feldman, 647 F.3d 450, 459 (2d Cir. 2011).