Monday, February 8, 2021

Excellent Article on Sentencing in Tax Crimes and White-Collar Crimes (2/8/21)

Readers of this blog will likely be interested in this article:  Jeremy Temkin, Tax Defendants Reaping The Benefit of Booker, 265 NYLJ (1/21/21), here, where the author analyzes Sentencing Commission data on departures and variances from the advisory Sentencing Guidelines calculations.

The data and discussion of the data are interesting.  I particularly focused on the following:

It is tempting to attribute the frequency of non-Guidelines sentences and the extent of the reduction in tax cases to a bias in favor of white-collar offenders. The data, however, does not bear that out, and defendants convicted of tax offenses are more likely to receive below-Guidelines sentences and avoid jail than other white-collar offenders.

In my practice and teaching, I often proclaim that tax crimes are just a subset of white-collar crimes.  I often do that by illustrating that for many of the prominent tax shelter prosecutions of promoters (including tax professionals), the defendants’ counsel were usually identified as white-collar crimes lawyers rather than tax crimes lawyers.  Many did not have deep tax backgrounds, but had tax experts available as needed.

From personal experience, most of the issues encountered in tax crimes prosecutions are just variations on issue in white-collar crime prosecutions.  Complex tax issues are not resolved in criminal prosecutions.  I am reminded of the famous quote (which I paraphrase) by prosecutors in the Enron that the case was not about complex accounting issues, but about lying, cheating and stealing of the sort that ordinary citizens (the jury) can understand with appropriate evidence and instructions.  See John C. Hueston, Behind the Scenes of the Enron Trial: Creating Decisive Moments, 44 Am. Crim. L. Rev. 197, 207 (2007); and See also Professor Stuart Green's play off of the quote in Stuart P. Green, Lying, Cheating and Stealing: A Moral Theory of White Collar Crime (2007).  Tax crimes encounter the same phenomenon that, to convict, the jury must be convinced that the defendant engaged in conduct that they recognize as lying, cheating and stealing.

So, Jeremy recognizes the relationship between tax crimes and “other white-collar crimes,” but concludes from  the data that sentencing goes lighter in the tax subset than in the complete white-collar set.  Interesting.

Editorial Note:  In my writings, I often do not hyphenate the words white and collar.  On a quick database search I find that both white collar and white-collar are frequently used.  I use white-collar in this blog because Jeremy did but usually default to white collar.

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