tag:blogger.com,1999:blog-1519969502186924526.post7093434137041822133..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: Civil Statutes of Limitation for Abusive Tax Shelters (5/10/10)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-1519969502186924526.post-10548830734933714172010-05-10T09:25:34.028-05:002010-05-10T09:25:34.028-05:00Mr. Townsend perhaps the answer to your question o...Mr. Townsend perhaps the answer to your question on civil fraud is relatively simple? The taxpayers are relatively well off and very well represented. The taxpayers have obtained 100s of millions in restitution from the purveyors of the shelters under the guise of being misled or did not understand and relied on the experts. All of the taxpayers who testified in the criminal cases testified the same and were promised no criminal prosecution for such testimony (and some received very favorable IRS settlements). So where does that leave the Government vis a vi fraud, no witnesses or documents in writing (which witnesses can claim were lies that the taxpayer knew of)? Trying to prove civil fraud on its face is almost impossible since all of the transactions could have made a profit (as remote as the chance may have been or in some cases not so remote since some taxpayers actually made a profit) assuming Section 165 even applies. A literal reading of Section 988 provides notwithstanding any other provision of the Code the losses are calculated and taken under Section 988. Section 988 does not even have a for profit motive requirement. This of course merely leaves the Government with having to prove the taxpayers knew the transactions had no economic substance assuming the Government could even prove the taxpayer had an understanding of the presumed economic substance requirement. Of course, the real answer is it would be almost impossible in a civil context to prove fraud since the actual law as written and mountains of case law become germane as opposed to the criminal context where all the DOJ has to do is threaten a witness with a life of torture in exchange for favorable testimony and the DOJ is able to distill an almost incomprehensible law into a few simple sentences for a jury to decide whether to put some well off dudes in a torture chamber for life.Anonymousnoreply@blogger.com