Thursday, November 29, 2012

Major CA2 Decision on E&Y Tax Shelter Convictions (11/29/12)

The Second Circuit rendered its decision in the Coplan tax shelter appeal from criminal convictions.  United States v. Coplan, et al., 703 F.3d 46 (2d Cir. 11/29/12). I offer four links to the case:  here is the copy from the Court site, here is a pdf that I have bookmarked (will have to download to see and follow the bookmarks), here is a link to a case service and here is a link to the GPO website.

Interestingly, oral argument was on November 14, 2011, so it took the panel to over a year to publish.

Given the scope of the opinion, I am going to address specific topics from the opinion in separate blog entries, beginning first with the Court's discussion of the Klein conspiracy as a prohibited common law crime, a deficiency that this panel of the the Court of Appeals could not remedy because the "common law" Klein conspiracy -- if indeed it as that -- had been approved and thus mandated for the panel by the Supreme Court and earlier Second Circuit precedent.  Other topics will following in separate blogs.

The subsequent blogs are:
  • Coplan #1 - Panel Questions Validity of Klein Conspiracy (12/1/12), here.
  • Coplan #2 - The Sufficiency Challenge for the Conspiracy Counts (12/2/12), here.
  • Coplan #3 - Venue for False Statements (18 USC 1001) (12/3/12), here.
  • Coplan #4 - Court Approves Defraud / Klein Instruction -- Making the IRS Job Harder May Be Enough (12/4/12), here.
  • Coplan #5 - Conscious Avoidance / Willful Blindness - Affirmed as to 1; Sidestepped as to 2 (12/4/12), here.
  • Coplan # 6 - Court Approves the Economic Substance Instruction (12/5/12), here.
  • Coplan #7 - Booker Variance Fixes a Glitch in the Guidelines (5/5/12), here,
  • Coplan #8 - Summary (12/5/12), here.

Wednesday, November 28, 2012

Restitution And Tax Collection from Retirement Accounts - Anti-Alienation (11/28/12)

In United States v. Hermann, 2012 U.S. Dist. LEXIS 166523 (ED VA 11/20/12), here [will create the link when available], the Court held that ERISA's Anti-Alienation provision for covered retirement accounts prevented forcible collection of criminal restitution from those accounts.  The Court concluded:
Although there is no Supreme Court or binding circuit authority squarely on point, there is closely analogous Supreme Court authority confirming that ERISA's anti-alienation and assignment provision bars criminal forfeiture of any interest in an ERISA plan. Thus, in Guidry v. Sheet Metal Workers National Pension Fund, 493 U.S. 365 (1990), a union sought to impose a constructive trust over the pension plan benefits owed to a union official who had pled guilty to embezzling funds from the union, in violation of the Labor Management and Disclosure Act of 1959. Id. at 367-69. On these facts, the Supreme Court rejected the effort to impose a constructive trust on the pension plan benefits, holding that ERISA's anti-alienation and assignment provision prohibited such a constructive trust. Id. at 375-76. Importantly, in reaching this conclusion, the Supreme Court declined "to approve any generalized equitable exception—either for employee malfeasance or for criminal misconduct — to ERISA's prohibition in the assignment or alienation of pension benefits." Id. The Supreme Court further explained that ERISA's anti-alienation and assignment provision "reflects a considered congressional policy choice, a decision to safeguard a stream of income for pensioners . . . even if that decision prevents others from securing relief for the wrongs done them." Id. Indeed, the Supreme Court made clear that "[i]f exceptions to this policy are to be made, it is for Congress to undertake that task." Id. And it is clear that Congress has made no such exception in ERISA or the criminal forfeiture statute. The latter, 21 U.S.C. § 853, states that forfeiture applies "irrespective of any provision of State law," but it does not except any federal law. To be sure, Guidry does not involve either an ESOP or criminal forfeiture, nonetheless these factual distinctions provide no reason in principle or policy to conclude that the result in Guidry should not control this case and bar forfeiture of defendant's interest in the ESOP.

Daugerdas Denied Access to Funds Subject to Forfeiture (11/28/12)

In United States v. Daugerdas, 2012 U.S. Dist. LEXIS 167631 (SD NY 11/7/12), Judge Pauley denied Daugerdas access to funds the Government seized pursuant to a post-indictment restraining order.  Readers will recall that Daugerdas was the well-compensated master-mind of a large tax shelter scheme that the Government alleged and proved to have been fraudulent.  I cut and paste Judge Pauley's opinion in this blog in the entirety (except for the caption), because it is efficient and well-reasoned and is instructive for federal tax crimes afficionados.



Defendant pro se Paul M. Daugerdas ("Daugerdas") moves to vacate or modify pre-trial restraints on certain proceeds seized by the Government. n1 For the following reasons, his motion is denied.
   n1 Jenner & Block LLP  (Daugerdas' attorney) has advised this Court that it will seek to withdraw as counsel if Daugerdas does not prevail on this motion. This Court permitted Daugerdas to file this motion pro se based on Jenner & Block LLP's  representation that it could not do so. (See Transcript dated June 25, 2012 at 7-8).

A jury convicted Daugerdas of one count of conspiracy to defraud the United States and the IRS, to commit tax evasion, and to commit mail and wire fraud in violation of 18 U.S.C. § 371; eighteen counts of tax evasion in violation of 26 U.S.C. § 7201 and 18 U.S.C. § 2; three counts of personal income tax evasion in violation of 26 U.S.C. § 7201; one count of corruptly obstructing and impeding the due administration of the Internal Revenue Laws in violation of 26 U.S.C. § 7212(a); and one count of mail fraud in violation of 18 U.S.C. §§ 1341 and 2. On June 6, 2012, this Court granted Daugerdas' motion for a new trial. That decision hinged on juror misconduct, not the sufficiency of the evidence. See United States v. Daugerdas,    867 F. Supp. 2d  445, 2012 U.S. Dist. LEXIS 82597, 2012 WL 2149238, at *1 (S.D.N.Y. Jun. 4, 2012). Daugerdas asserts that he cannot afford counsel unless the Government releases additional funds seized pursuant to a post-indictment restraining order.

Tuesday, November 27, 2012

Swiss Bank Pictet & Cie On DOJ Tax Radar Screen (11/27/12)

The news services report that the Justice Department is investigating Swiss bank Pictet & Cie.   See U.S. justice department probes Swiss bank Pictet (Reuters 11/25/12), here.  This should not be news to anyone paying attention to the unfolding events.

The introductory bullet points in the article are:
  • Pictet says will cooperate with U.S. justice
  • Pictet says business with U.S. clients complies with law
  • Bank had already handed over account data
  • Swiss seeking deal to get investigations dropped

The following is from a Tax Notes Today article, Kristen A. Parillo, Swiss Bank Pictet Under Investigation by Justice Department, 2012 TNT 228-3 (11/27/12)

Monday, November 26, 2012

The Cheek Defense in IRS Disbarment Proceedings (11/26/12)

In Banister v. United States Department of the Treasury, 2012 U.S. App. LEXIS 24179 (9th Cir. 2012), here, an unpublished opinion,  the Ninth Circuit affirmed the district court's decision affirming the disbarment of Mr. Banister from practice before the IRS.  The Court opens:
Banister admitted to advising clients that they were not liable for income taxes based on his belief that the Sixteenth Amendment was not properly ratified and his understanding that Section 861 of the Internal Revenue Code, 26 U.S.C. § 861, and the regulations thereunder ("Section 861") exempted the clients from having to pay income taxes. He also admitted to signing a client's tax returns as the returns' preparer when the returns stated that the client was not liable for income taxes under Section 861. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.
The ho-hum, routine, nonprecedential affirmance is not surprising given the claims that Banister made.  But, I think the Court's discussion if Banister's Cheek good faith defense is noteworthy, as a reminder.  The Cheek is that the defendant did not know the law and therefore could not have violated a known legal duty.  Cheek established that this defense was not available to a person who knows the law but claims the law is invalid.  That was Mr. Banister's problem in asserting the belief that the Sixteenth Amendment had not been properly ratified.

But, Mr. Banister had another arrow in his quiver -- that Section 861, properly read, exempted the persons he counseled from the income tax.  The question here was the role of the reasonableness of his belief.  Readers will recall that Cheek established the even an unreasonable belief that the law, properly interpreted, did not apply is a defense, but that the trier of fact (there the jury) could consider the unreasonableness of the belief as bearing upon whether the defendant actually knew the law's command and intentionally violated the command.  The Ninth Circuit said:

Saturday, November 24, 2012

IRS Memo on U.S. Citizens Resident Abroad Per Treaty (11/24/12)

An IRS memo addresses the U.S. tax status of U.S. citizen deemed to be a resident of a foreign country under a tax treaty "tie breaker" rule.  ECC 201247013 (8/10/12, released 11/23/12), here.  The rule stated is:
A U.S. citizen who is treated as a resident of another country under an income tax treaty would still be required to file a Form 1040 (assuming his income meets the filing thresholds) and would still be subject to U.S. tax on his worldwide income (except to the extent one of the exceptions to the saving clause applies).
The particular memo was issued with respect to Israel, but the general rule stated at the conclusion of the memo would seem to apply to other treaty countries with such a tie breaker rule as well.  And, of course, with respect to countries without such treaty tie-breaker, the U.S. citizen is required to pay U.S. tax on worldwide income.

There seems to be nothing surprising here.

Friday, November 23, 2012

IRS Use of Suspicious Activity Reports of Financial Institutions (11/23/12; revised 11/24/12)

Financial institutions are required to file Suspicious Activity Reports with the Financial Crimes Enforcement Network (FinCEN).  31 USC § 5318(g), here; the SAR form is here; FinCEN guidance is here; see also Wikipedia entry here.  For general background, I offer the following from my Federal Tax Crimes book (footnotes omitted):
Although there is no general duty under American law to report crimes, certain financial institutions (including money services businesses and high cash businesses such as casinos) are required to file with FinCen a report, called a Suspicious Activity Report (“SAR,” but not to be confused with the Special Agent’s Report with the same acronym which we encountered earlier).  This SAR combines features of earlier reports and is in addition to the CTR if required.  The SAR is required if the financial institution “knows, suspects, or has reason to suspect the money was derived from illegal activities” or the transaction was “part of a plan to violate federal laws and financial reporting requirements (structuring).”  The financial institution is not required to investigate or confirm that a crime has been committed. The financial institution is prohibited from telling its customer of the filing of the report, even in response to a subpoena.  The financial institution is protected from liability to the customer.  The IRS may share this SAR with the IRS examination function having civil tax responsibility, but components of the IRS receiving the information are required to keep the information secure to the same extent as if received from a confidential informant.
Recently, some divisions of the IRS have released memoranda advising personnel about the control and confidentiality requirements with respect to accessing SAR information.  See e.g., a recent SB/SE Division Memorandum (SBSE-04-1012-063, dated 10/16/12), here, and an estate and gift tax memorandum dated July 13, 2012, here.  See also an earlier Memorandum of Understanding -- in Government acronym-speak, "MOU," referenced and available at IRM 4.26.14, here, Exhibit 4.16.14-2, here.  For some reason, the MOU is reviewable only on line and then on a page by page basis.

Thursday, November 15, 2012

McBride #3 - Summary Analysis

I want to summarize my thoughts about the meaning, if any, of the McBride case beyond reconciling the dispute between the Government and McBride.  What does it tell taxpayers and the tax community?  I think that there has been some hyperbole about the case that will not bear close analysis.

In presenting my analysis, I will assume the reader's familiarity with the two prior blog discussions of the case.  Those are:
  1. McBride #1 - Court Holds Government Must Prove FBAR Willful Penalty by a Preponderance (11/11/12), here.
  2. McBride #2 - Proof of Willfulness (11/13/12), here.

First, as I previously noted, the facts were particularly damning against McBride on many fronts.  So, I am not sure that particular statements should be taken from the case and assume that they are controlling in less-damning fact patterns.  I have addressed a similar concern with respect to the Fourth Circuit's nonprecedential, unpublished opinion in United States v. Williams, 2012 U.S. App. LEXIS 15017 (4th Cir. 2012), here.  See Fourth Circuit Reverses Williams on Willfulness (Federal Tax Crimes Blog 7/20/12; revised 7/24/12), here; see also, however, my blog on nonprecedential opinions, Nonprecedential / Unpublished Appellate Decisions Morphing Into Precedent? (Federal Tax Crimes Blog 8/29/12), here.  Williams also presented an egregiously bad fact pattern, so as I note in the blog for that reason and for the reason that the Fourth Circuit itself said that the opinion was nonprecedential, I am not sure how much enlightenment the Williams opinion offers in less egregious fact patterns.  The McBride opinion relies significantly upon the Williams opinion and thus incorporates by reference the weakness of the Williams opinion as guidance in other cases with less egregious facts.

Wednesday, November 14, 2012

Petition for Certiorari on Issue of Whether Defense Witness Invoking Fifth But Offering Testimony After Conviction is Newly Discovered Evidence (11/14/12)

I have previously written on the problems of a defense witness asserting his or her Fifth Amendment Privilege.  See Defense Witness Immunity: Prosecutor Discretion and Compelling Testimony of a Reluctant Witness in Criminal Cases (Federal Tax Crimes Blog 9/6/11), here; and Defense Witness Immunity (Federal Tax Crimes Blog 10/10/12), here.  The defendant desiring that testimony for defense has limited options, since the general rule is that the prosecution and the Court are not required to confer immunity to a potential defense witness.

Circuit Splits Blog has an entry on whether a witness' testimony after asserting the Fifth during the trial constitutes "newly discovered evidence" under FRCrP Rule 33  Cert. Petition Challenges Lopsided Split Involving the Scope of “Newly Discovered Evidence” in Criminal Cases (Circuit Splits Blog 11/12/12), here.  FRCrP 33 provides:
Rule 33. New trial
(a) Defendant's Motion.   Upon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires. If the case was tried without a jury, the court may take additional testimony and enter a new judgment.
(b) Time to File.
(1) Newly Discovered Evidence. Any motion for a new trial grounded on newly discovered evidence must be filed within 3 years after the verdict or finding of guilty. If an appeal is pending, the court may not grant a motion for a new trial until the appellate court remands the case.
(2) Other Grounds. Any motion for a new trial grounded on any reason other than newly discovered evidence must be filed within 14 days after the verdict or finding of guilty. 
The Circuit Split Blog notes:
This summer the Fourth Circuit joined a majority of its sister circuits in holding that a convicted co-defendant’s exculpatory testimony given after their invocation of the Fifth Amendment does not constitute “newly discovered evidence” under Federal Rule of Criminal Procedure 33. Griffin v. United States, No. 11-7466 (4th Cir. July 24, 2012) (per curiam) (unpublished).
The Second, Third, Fifth, Sixth, Seventh, Tenth, Eleventh, and D.C., Circuits reach the same conclusion as Griffin.  The one competing Circuit opinion is from the First Circuit.  United States v. Montilla-Rivera, 115 F.3d 1060, 1066 (1st Cir. 1997).

The defendant in Griffin has filed a petition for certiorari on the basis the split.  The link to the petition for certiorari is here.

Tuesday, November 13, 2012

McBride #2 - Proof of Willfulness (11/13/12)

In the prior blog, I addressed the McBride court's holding that the Government's burden to prove willfulness was by a preponderance of the evidence rather than by clear and convincing evidence.  I address here the Court's holding that the Government had established McBride's willfulness in failing to file the FBARs.

I recommend that the reader go to the first blog to review the detailed and damning findings made by the Court.  See McBride #1 - Court Holds Government Must Prove FBAR Willful Penalty by a Preponderance (Federal Tax Crimes Blog 11/11/12), here.

In holding that the Government established McBride's willfulness, the Court's reasoning was as follows:

1.  Citing Safeco, the Court held that willfulness in a civil context covers "not only knowing violations of a standard, but reckless ones as well." Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57 (2004).  Then, citing the recent civil holding in Global Tech, the Court found comfort in the willful blindness concept.  Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068-69 (2011).  [JAT Note: For my discussion on Global-Tech, see Supreme Court Speaks on Willful Blindness (Federal Tax Crimes Blog 6/2/11), here; for all Federal Tax Crimes Blog discussions of willful blindness, see here.]

2.  The Court cited standard holdings (i) that civil willfulness is conduct that is voluntary, rather than accidental or unconscious and (ii) willfulness can be inferred from the circumstances, since direct proof the taxpayer's intent is rarely available, citing the lead tax evasion case of Spies v. United States, 317 U.S. 492, 499 (1943).

3.  The Court found that McBride had knowledge of his duty to comply with the FBAR requirements.

Sunday, November 11, 2012

McBride #1 - Court Holds Government Must Prove FBAR Willful Penalty by a Preponderance (11/11/12)

Another court has applied a preponderance of the evidence burden in holding that the Government had established the taxpayer's willfulness for asserting the willful FBAR penalty.  McBride v. United States, 908 F. Supp. 2d 1186 (D. UT 2012), here

Here are the documents, including the Court's Findings of Fact and Conclusions of Law and the related Documents:
  1. 20120514McBride-P'sTrialBrief.pdf, here.
  2. 20120514McBride-D's Trial Brief.pdf, here.
  3. 20120521McBride-Transcript.pdf, here.
  4. 20120522McBride-Transcript.pdf, here.
  5. 20120724McBride-USPropFoF&Conclusions.pdf, here.
  6. 20120822McBride-D Obj re Govt Prop FoF.pdf, here.
  7. 20120822McBride-DPropFoF&Conclusions.pdf, here.
  8. 20121108McBride-Opinion.pdf, here.
Brief Summary of the Case

Readers will recall that the willful FBAR penalty is the greater of $100,000 or 50% of the amount in the account.  31 USC 5321(a)(5), here.  The penalty in question was the pre-10/23/04 version which provided for the same willful conduct a penalty of $25,000 or the value of the unreported account, not to exceed $100,000.

The McBride facts as found by the Court are ugly for McBride.  I won't recount them in detail, but suffice it to say they involved (i) clear intent to underreport significant amounts of income tax by diverting U.S. income to the offshore accounts, (ii) clear intent to establish the accounts out of the expected line of sight of the IRS with the purpose of furthering the evasion, (iii) information provided to him some of which he read that advised that there were reporting obligations, (iv) answers to the 1040 Schedule B questions of no when the defendant certainly knew he had interests in foreign accounts, (v) lying to the IRS about the offshore actyivity, and (vi) other really bad facts.

Thursday, November 8, 2012

Commissioner's Swan Song - Excerpts on Offshore Bank Initiatives (11/8/12)

Doug Shulman, the outgoing Commissioner of Internal Revenue and principal public promoter of the IRS's and DOJ's offshore account initiatives, issued these prepared remarks before the AICPA in Washington, D.C., here.  He recounts his major initiatives, and includes the offshore accounts initiative at the top of the list.  I excerpt only the portion related to offshore accounts.
Today, I want to share with you some of the results of almost five years of relentless focus on a handful of strategic priorities we set for the IRS. The priorities are: 
•  Creating breakthrough strategies to combat international tax evasion; 
* * * * 
So, let me begin with our efforts on the international front.  Both corporations and individuals operate in the global economy, as corporations seek out new markets and individuals have global exposure through their investments, including retirement accounts. 
Yet, this fundamental shift to a more global economy has created a real set of compliance challenges for the IRS. On the individual front, we have made putting a big dent in offshore tax evasion a major priority. 
We view offshore tax evasion as an issue of fundamental fairness. Wealthy people who unlawfully hide their money offshore aren’t paying the taxes they owe, while schoolteachers, firefighters and other ordinary citizens who play by the rules are forced to pick up the slack and foot the bill.

Wednesday, November 7, 2012

Credit Suisse Enabler Christos Bagios Plea and Sentencing (11/7/12)

Yesterday, Christos Bagios, a Credit Suisse Banker who had been in custody for some time, pled and was sentenced.  The following are the relevant documents:

Bagios Information, here.
Bagios Plea Agreement, here.
Bagios Sentencing Minutes, here.
Bagios Judgment, here.

Key features:

Defendant:  Christos Bagios
Bank:  Former employee of Credit Suisse; also involved UBS and Neue Zuercher Bank
Count of Plea:  Defraud / Klein Conspiracy (1 count)
Tax Loss:  $1,000,000 +  (See below indicating the tax loss was at least $1,086,75)
Fine: -0-
Restitution: -0-
5K1 Departure:  Irrelevant because of plea - see discussion below.
Sentence:  37 days imprisonment - see discussion below
Court:  SD FL
Judge:  Kenneth Marra (Wikipedia here)


1.  Type of Plea.  Normally tax pleas leave sentencing in the discretion of the Judge who is guided by the Sentencing Guidelines and Booker.  This particular plea, however, was under FRCrP 11(c)(1)(C) and (3)(A), here.  In a plea pursuant to that rule, the parties agree upon the sentence.  If the Court rejects the plea as made, either party may withdraw from the plea agreement.  Obviously, such a plea takes out some of the risk of a guilty plea.  But judges have been known to reject those pleas.  One famous instance of a judge rejecting such a plea was in the Lea Fastow case, here.  Lea Fastor was the wife of Andy Fastow of Enron fame.

Tuesday, November 6, 2012

Article on Tax Crimes Subjects at Seminar (11/6/12)

Tax Notes Today reports on offshore account issues and other criminal tax issues discussed at the California Tax Bar and California Policy Conference, here.  Jeremiah Coder, CI Division Monitoring Voluntary Disclosures to Ensure Follow-Through, 2012 TNT 215-1 (11/6/12).  I do not have a link to the article or permission to post  it, but summarize key points:

1.  An IRS representative said that
CI checks to ensure that taxpayers who undergo a pre-clearance check for acceptance into the voluntary disclosure programs follow through with disclosure. "Those [taxpayers] are suspect, and we are looking at those who decided not to continue to come through. Will it be Criminal Investigation? I don't know; it could be a civil audit,"
2.  The IRS representative also \
warned that taxpayers who make only partial disclosures or don't supply all the information about their offshore activity to the IRS will face severe consequences. "When [the taxpayer] is not truthful, yes, CI will come back in," and the taxpayer may be criminally liable, she said, adding that the same is true if badges of fraud or lies are uncovered during an examination.

Sunday, November 4, 2012

Article on Erosion of Swiss Secrecy (11/4/12)

Michael Birnbaum, Threatened by isolation, Switzerland lifting veil on secret bank accounts (Washington Post 11/4/12), here.  The article is very good summary of the current situation.  Here are some excerpts I thought might be of interest to readers of this blog:
[W]ith the euro crisis forcing Switzerland’s revenue-starved neighbors to search out new sources of money, the Alpine country’s bank vaults are suddenly looking irresistible. In recent months, the nation’s strict banking secrecy has been under assault from countries such as Germany and Britain as never before. Experts say that the last veils may soon be dropped altogether, bringing the hush-hush tradition to a final end. 
* * * * 
Many in Switzerland’s banking capitals have resigned themselves to handing over their ledger books to international tax authorities sooner or later. In the hushed, marble-lined hallways of grand banks in Zurich and Geneva, the whispers are of a future when the country no longer serves as a hub for tax evasion. 
You can hardly understate what is happening,” said Luc Thevenoz, director of the Center for Banking and Financial Law at the University of Geneva. “Switzerland has created this image that the big value that Swiss bankers brought their clients was secrecy. It was an attractive proposition, especially with regard to tax issues.” 
No one is sure quite how much Switzerland’s private wealth management sector depends on tax evasion. Bankers’ estimates of deposits from private individuals range from 30 percent on the low end to 60 percent or more. Many say that a significant portion of those funds will drain away from Swiss coffers.

Saturday, November 3, 2012

Outlier Foreign Account Case Sentencing (11/3/12)

I previously blogged on the conviction of Aristotle R. Matsa (Rick Matsa) for tax crimes.  Outlier Conviction for FBAR and Many Other Tax-Related Crimes (4/21/12), here.

DOJ announced his sentencing here.

The sentencing announcement adds little to what was known before (see prior blog) except the following:

  1. The sentence is 85 months incarceration, subject to good time credit, of course.
  2. The criminal fine is $265,000.
  3. The restitution to the IRS is $388,000 and to a client is $24,069 for embezzlement.
  4. The disclosures about the foreign account and the FBAR violation are essentially the same.

Friday, November 2, 2012

IRS Releases Names of Citizenship Renouncers (11/2/12)

The IRS has published here the names of U.S. persons renouncing citizenship.  There is a person named Lisa Ann Townsend on the list, but I don't know who she is.

The explanation is as follows:
SUMMARY: This notice is provided in accordance with IRC section 6039G of the Health Insurance Portability and Accountability Act (HIPPA) of 1996, as amended. This listing contains the name of each individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the Secretary received information during the quarter ending September 30, 2012. For purposes of this listing, long-term residents, as defined in section 877(e)(2), are treated as if they were citizens of the United  States who lost citizenship. 
For a chart showing the renouncers over the years 2005 to present, see Andrew Mitchel's International Tax Blog here.

Hat tip to Tax Prof Blog, here.

Thursday, November 1, 2012

Relevant Conduct in Tax Cases (11/1/12)

A person recently posted a comment on the concept of relevant conduct, so I thought I would devote a blog to discussing the issue.  The comment was posted to the following blog entry:  An Outlier Offshore Account Tax Obstruction Plea (10/26/12), here.

The following is a cut and paste of my Federal Tax Crimes text (footnotes omitted) discussion of relevant conduct.  The text including the footnotes is available for download here.  I also provide some links at the end to related materials.  Please note that the following cut and paste is not indented to show that I am quoting.  It is my own work, so I authorize myself to do that.

8. Relevant Conduct.

Prior to the Sentencing Guidelines, the convicted defendant’s conduct beyond the offense(s) of conviction could be and was often considered in sentencing.  Basically, any thing that the sentencing judge felt should be considered in determining an appropriate sentence could be considered, so long as it was not a constitutionally prohibited factor or other matter well outside the boundaries of good judgment.  This principal was codified as follows:
No limitation shall be placed on the information concerning the background, character, and conduct of a person convicted of an offense which a court of the United States may receive and consider for the  purpose of imposing an appropriate sentence.