Third Circuit Affirms Sentence for Tax Obstruction (§ 7212(a)) Under the Obstruction Guidelines (8/22/16)

The Third Circuit's recently unpublished opinion in United States v. Celluci, 2016 U.S. App. LEXIS 14958 (3d Cir. 2016), here, serves as a reminder of some hiccups in the normal application of the Guidelines for tax sentencing.  There, the taxpayer pled to wire fraud (§ 1343) and tax obstruction (§ 1343).  For sentencing, the counts were grouped under SG § 3D1.3.and sentenced under the tax obstruction Guideline.  Now, normally that would mean that the taxpayer's calculations would be made under the evasion Guideline in SG § 2T1.1.  But, as an "obstruction" crime, Guidelines Appendix A (Statutory Index) provides that the Guideline calculation for the omnibus clause tax obstruction may be made under either SG 2J1.2, Obstruction of Justice, or SG 2T1.1.  Based on the taxpayer's conduct in the two grouped crimes, the sentencing court determined that the Obstruction of Justice Guideline was more appropriate.

Taxpayer complained on appeal.  The Court of Appeals affirmed.  The reasoning for the affirmance is short, so I quote (footnote omitted):

The Statutory Index provides that for a conviction under the omnibus clause of § 7212(a), either U.S.S.G. § 2J1.2 (Obstruction of Justice) or § 2T1.1 (Tax Evasion) may be appropriate.3 U.S.S.G. App. A. Where, as here, the Statutory Index "specifies more than one offense guideline for a particular statute, the court must 'determine which of the referenced guideline sections is most appropriate for the offense conduct charged in the count of which the defendant was convicted.'" Aquino, 555 F.3d at 127 (quoting U.S.S.G. § 1B1.2 cmt. n. 1). 

In determining which of two or more guidelines is "most appropriate," U.S.S.G. § 1B1.2 cmt. n. 1, we consider only the conduct charged in the relevant count of the indictment. See U.S.S.G. § 1B1.2(a); Boney, 769 F.3d at 160; Aquino, 555 F.3d at 129. The indictment here charges that, as part of its efforts to collect back taxes from OLR, the IRS sent CPA a Notice of Levy that directed CPA to submit payments due to OLR to the IRS instead. Cellucci then "endeavor[ed] to obstruct and impede the due administration of the internal revenue laws" by creating a false Release of Levy and transmitting it to CPA, so that CPA would believe it was no longer obligated to submit payment to the IRS and would instead send the payment to OLR. App. 18. 

Section 2J1.2, the obstruction of justice guideline, addresses various offenses, including "obstructing a civil or administrative proceeding." U.S.S.G. § 2J1.2 cmt. n. 2. In the context of a prosecution under § 7212(a), an IRS "action" or "proceeding" has been defined as "some step [by the IRS] to investigate a particular taxpayer beyond routine administrative procedures such as those required to accept and process tax filings in the ordinary course." United States v. Miner, 774 F.3d 336, 346 (6th Cir. 2014). The IRS's efforts to collect back taxes from OLR, which included sending the Notice of Levy to CPA, involved more than routine administrative procedures, and thus are appropriately viewed as a "proceeding." Because Cellucci's criminal scheme—an effort to re-direct the payment from CPA to her business, rather than the IRS—directly interfered with that proceeding, the District Court appropriately relied on § 2J1.2 in calculating her sentence. 

Citing her "transmission of a fraudulent tax document," Cellucci argues that § 2T1.1, which applies to "Tax Evasion" as well as "Fraudulent or False Returns, Statements, or Other Documents," better captures her conduct. Cellucci Br. 18. We disagree. In sending the forged Release of Levy to CPA, Cellucci not only transmitted a fraudulent tax document to evade the IRS's collection efforts, but sent it to a third party, while pretending to act for the IRS. Thus, her conduct differs significantly from that most often associated with tax fraud, like concealing income from or filing a false return with the IRS. See United States v. McGill, 964 F.2d 222, 230 (3d Cir. 1992). 

For these reasons, we conclude that the District Court did not err, plainly or otherwise, in using § 2J1.2 to calculate Cellucci's sentence.

With this reminder, I cut and paste from the Statutory Index for the more common tax crimes

26 U.S.C. § 7201 2T1.1
26 U.S.C. § 7202 2T1.6
26 U.S.C. § 7203 2S1.3, 2T1.1
26 U.S.C. § 7206(1),(3),(4),(5) 2S1.3, 2T1.1
26 U.S.C. § 7206(2) 2S1.3, 2T1.4
26 U.S.C. § 7207 2T1.1
26 U.S.C. § 7212(a) (omnibus clause) 2J1.2, 2T1.1

18 U.S.C. § 286 2B1.1
18 U.S.C. § 287 2B1.1
18 U.S.C. § 371 2A1.5, 2C1.1 (if conspiracy to defraud by interference with governmental functions), 2T1.9,
2K2.1

[The offense conspiracy for a tax crime presumably would be sentenced under the appropriate offense Guideline.]

The Current Guidelines (2015) are available here for download in pdf format.  (Note that the pdf is bookmarked for easy movement around the various parts, so open up the bookmarks.)