Interest in DOJ Tax Reunion/Wake for DOJ Tax Alumni (10/17/25)

I am trying to assess interest among DOJ Tax Alumni for a Reunion/Wake for the Tax Division. Since some DOJ Tax Alumni read this blog, I offer this link to the blog post on the DOJ Tax Alumni Blog I maintain: Fillable On-Line Form to Assess Interest in DOJ Tax Alumni Reunion/Wake (10/7/25), here.

WSJ Article Reporting Possible Political Changes to IRS CI (10/16/25)

Yesterday’s Wall Street Journal has an article about the Trump Administration’s alleged plan to weaponize IRS Criminal Investigation (“CI”). Brian Schwartz, Richard Rubin, and  Joel Schectman, Trump Team Plans IRS Overhaul to Enable Pursuit of Left-Leaning Groups (WSJ 10/15/25), here [which requires a subscription to read].

The article reports that Trump Administration is preparing to make “sweeping changes” at the IRS by installing “allies of President Trump” at CI “to exert firmer control over the unit and weaken the involvement of IRS lawyers in criminal investigations.” The changes reportedly are “being driven by Gary Shapley, an adviser to Treasury Secretary Scott Bessent.”

The article reports on efforts to have the IRS investigate and revoke tax-exempt status for organizations, such as Harvard University, that do not bend the knee to Trump.

As respects CI, the article reports.

Shapley and those close to him are also proposing changes to the rules on how IRS criminal probes are conducted, according to people familiar with the matter. Attorneys from the IRS chief counsel’s office typically work with IRS-CI agents as they move through investigations, particularly for steps such as search warrants and bringing a case to the Justice Department for potential prosecutions. The Internal Revenue Manual, the agency’s procedure handbook, spells out the involvement of chief-counsel lawyers and the CI chief in criminal cases. It includes extra steps for sensitive cases, such as those involving federal elected officials and tax-exempt groups.

Shapley wants to change the manual so that the chief-counsel lawyers have less of a role, these people explained. 

Some senior IRS criminal tax attorneys are already voicing concern about the methods of investigators while Trump encourages his administration to target donors and nonprofit groups, according to people familiar with the matter. Some of the criminal tax attorneys have privately argued against moving ahead with at least one case, with the argument it is vindictive prosecution and seems politically motivated.

Shapley has previously complained about the IRS criminal-tax attorneys’ work with IRS-CI agents. Criminal-tax counsel “is not a respected organization within IRS-CI,” Shapley said in a 2023 congressional hearing about the Hunter Biden probe.

A Sad Event for the Country’s Criminal Tax Enforcement System (10/15/25)

I today write on what to me is a very sad story for our country. Roger Ver, a crypto mogul and tax evader (by his admission in the story I tell here), just bought his way out of charged tax crimes by the amounts (tax, penalties, and interest) he already owed the Government for the charged years. (There is no indication that he will pay anything for uncharged years for which the civil statute of limitations would be open if civil fraud was involved (which he did not admit under the plea agreement), nor is there any agreement that he will be required to cooperate in the determination and payment of tax liability for any other years). In other words, he bought his way out of a criminal indictment and prosecution by paying what he admitted he owed. Worse, there is more to the story as I tell below.

The key documents are

• The plea agreement, here.
• The DOJ Press Release, here, which says in part:

“We are pleased that Mr. Ver has taken responsibility for his past misconduct and satisfied his obligations to the American public. This resolution sends a clear message: whether you deal in dollars or digital assets, you must file accurate tax returns and pay what you owe,” said Associate Deputy Attorney General Ketan D. Bhirud. 

“Mr. Ver is accepting responsibility for his actions and has agreed to pay a substantial penalty,” said Acting United States Attorney Bill Essayli of the Central District of California. “Every person, whether you’re a millionaire or not, is required by law to pay taxes and we will not hesitate to hold anyone accountable.” 

“Today’s resolution demonstrates that there are consequences for those who intentionally conceal their assets and evade their tax obligations,” said Kareem Carter, Executive Special Agent in Charge. “No matter how sophisticated the technology or the asset, IRS-CI will continue to follow the money, ensure compliance, and protect the integrity of our tax system.”

• The NYT article here that offers some key background including the following key paragraphs:

The case is poised to become the latest example of how the Trump administration has systematically dismantled a yearslong government crackdown on the crypto industry, a sector rife with fraud, scams and theft. 

Like other beneficiaries of the rollback, Mr. Ver sought to curry favor with President Trump by linking his case to the president’s grievances about the weaponization of the justice system.

This year, Mr. Ver paid $600,000 to Roger Stone, a longtime associate of Mr. Trump, to try to abolish the tax provisions at the heart of the case. And the crypto investor hired David Schoen, a lawyer who represented Mr. Trump during his second impeachment trial. Lobbying filings show that Mr. Ver also hired Christopher M. Kise, a lawyer who defended Mr. Trump against various criminal and civil charges, as well as the lobbying firm run by Brian Ballard, a major Trump fund-raiser.

10th Circuit Reverses on Defraud/Klein conspiracy instruction and Advice of Counsel Instruction, with Reminder on Limitations of Pattern Jury Instructions (9/4/25; 9/7/25)

See discussion added at end on 9/5/25 @ 11:30 am.

In United States v. Kearney, ___ F.4th ___ (10th Cir. 9/2/25), CA10 here and GS here [to come], the Court held that the trial court erred in two jury instructions: (i) the trial court instructed the jury on the uncharged offense conspiracy rather than the charged defraud conspiracy; and (ii) the trial court did not include the conspiracy charge in the advice-of-counsel defense instruction. Both errors required a remand for further proceedings.

Both holdings are not particularly exceptional. The first holding does offer an opportunity to remind readers of the difference between the two types of conspiracy criminalized by 18 USC § 371, here, helpfully titled “Conspiracy to commit offense or to defraud United States.” The two types of conspiracy are thus often identified as the offense conspiracy and the defraud conspiracy. The offense conspiracy is a conspiracy to commit a specific offense. The defraud conspiracy is a conspiracy “to defraud the United States, or any agency thereof in any manner or for any purpose.” But defraud, as interpreted, has a special meaning for the defraud conspiracy. The word “fraud” and its counterpart “defraud” normally requires an object to obtain money or property by fraudulent means. Fraud for purposes of the defraud conspiracy includes that object but also includes an object to impair or impede the lawful functioning of a government agency, here the IRS. (When charged with the latter object (impair or impede), the defraud conspiracy is often referred to as a Klein conspiracy, named after United States v. Klein, 247 F.2d 908 (2d Cir. 1957).) I have written on the defraud/Klein Conspiracy and its textual problem. The following is my most recent foray into the subject: Is It Too Much to Ask that the Defraud Conspiracy Crime Require Fraud? (Federal Tax Crimes Blog 8/3/24; 8/6/24), here (citing a prior article and blogs).

But, for this blog, accept the defraud conspiracy as it is now; it does not require what we normally think of as fraud with a monetary or property object but can include an object “to interfere with or obstruct one of its lawful governmental functions by deceit, craft[,] or trickery, or at least by means that are dishonest.” Hammerschmidt v. United States, 265 U.S. 182, 188 (1924), quoted in Kearney at Slip Op. 8.

The problem in Kearney was that, at the Government’s invitation at trial, the court instructed the jury based on the 10^th Circuit’s pattern jury instruction describing the offense conspiracy which was not charged. Kearney was charged with and convicted for the defraud conspiracy which, the 10^th Circuit panel holds should have included the limiting language from Hammerschmidt quoted above.

The Government requested the offense conspiracy instruction based on the 10^th Circuit’s Pattern Jury Instructions. The 2025 version of the pattern jury instructions is here (see Instruction 2.19 CONSPIRACY 18 U.S.C. § 371). That pattern instruction is for the offense conspiracy without any discussion of the defraud conspiracy, a discussion which, if included, might have timely alerted the parties and the judge as to the problem with the offense conspiracy instruction. (In fairness, Kearney’s attorney realized the problem and proposed a variation instruction.)

The Court offers this helpful discussion on the limitations of pattern jury instructions (Slip Op. 12-13):

          To be sure, the district court used this circuit’s pattern instruction on § 371 conspiracies, which typically “weighs against a finding of plain error.” United States v. Kepler, 74 F.4th 1292, 1315 (10th Cir. 2023). But pattern instructions are merely a guide. See Tenth Cir. Crim. Pattern Jury Instrs. Introductory Note (“The Committee’s approach was to generate generic minimalist instructions that would be tailored to individual cases.”); United States v. Freeman, 70 F.4th 1265, 1280 n.13 (10th Cir. 2023) (noting that “pattern instructions are merely intended to serve as a guide” and suggesting that, where Tenth Circuit has not issued pattern instruction for offense, parties may need “to select alternate formulations” of offense elements). And the pattern instruction in this instance not only fails to account for the two kinds of conspiracies in § 371, it doesn’t describe the charged offense at all. See Tenth Cir. Crim. Pattern Jury Instrs. § 2.19 at 98 (2025). Given the  statute’s plain language, the error in using the pattern instruction on conspiracy to violate the law for a charge of conspiracy to defraud was also plain.

Third Circuit Holds Tax Taxpayer Fraud is not Required for 6501(c)(1) Unlimited Statute of Limitations, Creating Conflict (8/18/25; 10/22/25)

Added 10/22/25 @ 3:40pm: On October 17, 2025, the Third Circuit denied rehearing and rehearing en banc and issued a revised opinion in Murrin v. Commissioner, ___ F.4th ___ (3rd Cir. 10/17/25), CA3 here and GS here. The revised opinion reaches the same result as the earlier opinion--fraud on the return permits the unlimited statute of limitations regardless of whether or not it is the taxpayer's fraud. I have not analyzed the opinion to see where precisely the changes were. The opinion is a straight-foward textualist reading of the Code provision. It is apparent that, as with the original opinion, the author is not that familiar with tax procedure. (See e.g., p. 4 n. 1, basically same as original opinion.)

In Murrin v. Commissioner, ___ F.4th ___ (3rd Cir. 8/18/25), CA3 here and TN here, the Court held that the §6501(c)(1), here, unlimited statute of limitations applying "In the case of a false or fraudulent return with the intent to evade tax" applies even without the taxpayer's personal fraud. The opinion is a straightforward textualist interpretation of the governing statute. Since the opinion is relatively short, I am not sure my nitpicking (aka pontificating) over the reasoning and specific text would be helpful to readers of this Blog, most of whom are already familiar with the issue.

In the event my thoughts may be helpful, I link here first my prior blogs generated by the search terms "allen fraud limitations" which picks up the blogs that discussed the issue. (If you click that link, the returns are first in some relevance scoring of the content order for the terms but there is a link to put them in reverse date order.) The more recent blog discussions that I think may be most helpful to readers wanting more than offered in Murrin are:

• On the Tax Court decision in Murrin: Tax Court Again Declines to Reconsider Its Holding that the Preparer's Fraud without the Taxpayer's Fraud Invokes Unlimited Statute of Limitations (Federal Tax Procedure Blog 1/25/24; 2/5/24), here (where I discuss and link Professor Bryan Camp's discussion of the Tax Court opinion in Murrin) (those reading the Third Circuit opinion in Murrin will see that Professor Camp filed an amicus in favor of the taxpayer's position).
• On BASR P’ship v. United States, 795 F.3d 1338 (Fed. Cir. 2015), which Murrin conflicts (Murrin substantially adopts the dissenting opinion in BASR), I did not write a separate blog on the BASR opinion, but I wrote one on the court awarding attorneys fees under § 7430: Major Attorneys Fee Award for BASR Partnership Prevailing on the Allen Issue in Federal Circuit (Federal Tax Procedure Blog 2/11/17), here. This conflict certainly insures a petition for cert by Murrin. I suspect that there may be a flurry of amicus briefs on the petition and, if cert is granted, on the merits briefing because a lot of wealthy taxpayers investing in fraudulent taxpayers have a dog in the hunt, so to speak.
• On City Wide Transit, Inc. v. Commissioner,  709 F.3d 102 (2d Cir. 2013) discussed in Murrin: Second Circuit Holds That Fraud on the Return -- Even If Not the Taxpayer's -- Causes an Unlimited Civil Assessment Statute of Limitations to Apply (Federal Tax Procedure Blog 2/4/13), here.
• My early venture into the subject discussing an important extension of a holding that the taxpayer's fraud is not required if the return is fraudulent: Civil Tax Statute of Limitations for Fraudulent Tax Shelters (Federal Tax Procedure Blog 12/19/09), here.

 This blog entry is cross-posted on the Federal Tax Procedure Blog, here.

Court of Appeals Reverses on Statute of Limitations Grounds for Failure Foreign Evidence Tolling Under 18 USC § 3292(a)(1) and For Resentencing (8/13/25)

In United States v. Gyetvay, 149 F.4th 1213 (11th Cir. 2025), 11th Cir. here amd GS here. the Court

• reversed Gyetvay’s convictions in Counts 11 and 12 for Willfully Failing to File Tax Returns for the years 2013 and 2014;
• otherwise sustained on the counts of conviction; and
• remanded for re-sentencing without the reversed Counts and for restitution.

I provide the following chart to show what the Court of Appeals did and the possibility of retrial on the Counts for which the jury hung. I then provide some commentary below the chart.

Counts	Charge	Sentence Max	Jury Verdict	Court of Appeals	Retrial
1-3	Aiding or Assisting § 7206(2) years 2006, 2007, 2008	9 years (3 years on each count)	Hung		Yes
4-6	Tax Evasion § 7201  Years 2007, 2008, 2009	15 years (5 years each count)	Hung		Yes
7-9	Willfully Failing to File § 7203 Years 2010, 2011, 2012,	3 years (1 year each count)	Hung		No - Foreclosed by reversal of convictions on Counts 10 & 11.
10 & 11	Willfully Failing to File § 7203 Years 2013, 2014	2 years (1 year each count)	Guilty	Reversed – Statute of Limitations was not tolled under 18 USC § 3292(a)(1)	No
12	Willfully Making False Statements on Streamlined Procedures Certification 18 USC § 1001 & 2	5 years	Guilty	Did Not Appeal, but vacates restitution order based on this Count	Re-sentencing
13	Willfully Failing to File FBAR - 31 USC. §§ 5314 & 5322(a); 31 C.F.R. §§ 1010.350, 1010.306(c)-(d) and 1010.840(b) Year 2014	5 years	Guilty	Affirmed	No
14	Wire Fraud Year 2014	20 years	Acquitted	Govt did not appeal	No
15	Wire Fraud No year	20 years	Hung		Yes

JAT Comments:

Free CourtListener Docket Sheet and Documents for Major Tax Crimes Case (Also Major White Collar Crimes Case) (7/3/25)

I write to inform principally students and young lawyers of a case with documents that can educate in both tax crimes and white collar crimes. The case is United States v. Goldstein (D. Md. No. 8:25-cr-00006), with free access to docket entries on CourtListener, here. CourtListener has the docket entries but offers free access to a document only after the first CourtListener member retrieves the document from PACER, a paid service. For a case of this notoriety, most of the important documents will have been so retrieved and are available free.

Although I have only looked at some of the documents that interest me, I think the quality of lawyering is very good. Furthermore, tax crimes are white-collar crimes in a tax setting. Hence, the documents (which are many) are often hashing out themes that will be of interest to lawyers and students of white -collar crimes.

I recommend that those interested review the CourtListener document entries and review the documents that you find interesting. 

You can also do a search of the CourtListener Recap Archive which has docket sheets and documents for all federal cases. The Recap Archive with case search features is here and looks like this:

Finally, CourtListener is a good resource. The home page is here. It is free to join and relies on donations. In my practice and writing, I use CourtListener a lot.

There are other similar free services, but this is the one I use. I'm not saying that it is the best, but it is my go-to source for court documents.

Update on IRS Form 11457 for Voluntary Disclosure in IRS VDP (6/30/25)

The National Taxpayer Advocate announced that, at her urging, the IRS has agreed:

1. to eliminate the Part II (complete upon acceptance into the VDP) checkbox

2. to establish a “working group to comprehensively review the current VDP, provide recommendations for reforming the program, narrow the definition of illegal source income to encourage greater participation in the VDP, and clarify other terms.”

See Criminal VDP: TAS Reports a Win For Taxpayers – IRS Agrees to Remove Willfulness Checkbox on VDP Application Form (NTA Blog 6/24/25), here.

I revised the working draft of the Federal Tax Procedure 2025 Editions (to be published at least by early August 2025) to include this information. Perhaps the key issues I mention in the working draft are:

• As of the date of this publication, the Form available on the IRS website is dated 11/12/24 and thus does not yet implement that decision. Can a taxpayer in the meantime omit checking the box in the currently available Form?;

AG Bondi and President Trump Violate Precepts of Criminal Justice that DOJ Tax Knows and Gets Right (6/8/25)

 I write today on a basic premise of the criminal justice system that Trump and his minions have misrepresented in a malevolent way. I contrast those misrepresentations with the way DOJ Tax Division (and other DOJ components) act more responsibly.

Attorney General Pam Bond is quoted in several news articles, including ABC News quoted here, except that I bold-face for emphasis):

"The grand jury found that over the past nine years, Abrego Garcia has played a significant role in an alien smuggling ring," Bondi said. "They found this was his full time job, not a contractor. He was a smuggler of humans and children and women. He made over 100 trips, the grand jury found, smuggling people throughout our country."

Abrego Garcia's indictment was the pretext for obtaining his return from El Salvador that the courts have ordered for some time now.

As all readers of this blog know (I hope), an indictment is not a finding of guilt nor is it a finding of any fact such as proclaimed publicly by AG Bondi. Grand juries only determine probable cause to indict–a significantly lesser standard than beyond a reasonable doubt (the standard for finding guilt of a crime)--and indictments do not require unanimity as required in criminal trials.

When done right, as DOJ Tax routinely does, the announcement of any indictment always includes:

An indictment is merely an allegation. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

See, e.g., here.

Further, as to the role of grand juries in the system, AG Bondi should acquaint herself with the relevant provisions of the DOJ's Justice Manual that all DOJ attorneys, including the AG, must know and follow (except in her case she may not know or follow):

Title 9: Criminal, 9-11.000 - Grand Jury, here

AG Bondi might also acquaint herself with AG Robert Jackson's (later Supreme Court Justice) famous statement on "The Federal Prosecutor," posted on DOJ's website here.

Conflicting Statutes of Limitations for Regular Tax Assessments and Restitution-Based Assessments (4/27/25)

In United States v. Brown (W.D. WA Case No. 24-cv-05021 Dkt. No. 38 Order dated 4/21/25), GS here and CL here, the Court upheld the validity of a restitution-based assessment (“RBA”) against Brown that was for the same tax that had been previously assessed against Brown. (For prior Blogs on RBAs on the Federal Tax Crimes Blog, see here, and on the Federal Tax Procedure Blog, here.) For clarity, I will differentiate the two assessments by calling the first-in-time assessment, the regular assessment and the second-in-time assessment the RBA. The reason that was even an issue was because Brown never fully paid the regular assessment and the 10-year statute of limitations to collect any balance on the regular assessment (by reducing to judgment) had expired. Brown claimed that, since the statute of limitations on the regular assessment had expired, thus preventing the IRS from claiming on that regular assessment, the IRS could not end-run the regular assessment statute of limitations based on the RBA assessment. At least that is how I understand Brown’s claim that the court rejected, thus permitting the government to reduce the RBA to judgment and use the RBA extended statute of limitations to collect (including further extending the statute of limitations).

I think the court properly gives a good textual reading of the applicable statutory provisions. I am concerned that the decision may not be consistent with the purpose or intent of the statute. (For a textualist, purpose or intent may not matter.) Although I have not filtered back through the legislative history, my understanding of the purpose of the RBA was to avoid requiring the IRS to jump through assessment hoops for tax ordered as restitution. In other words, it was to permit the IRS to make an immediate assessment where it had not assessed before. (Stated otherwise, it was not to give the IRS two independent assessments to collect. The Code provisions do not say that, but that is my understanding of the need for an RBA. If the tax later subject to restitution had already been assessed, there would be no need for an RBA. And the IRS could deal with an expiring statute of limitations on the regular assessment by simply reducing the regular assessment to judgment, thereby refreshing the statute of limitations.

It is true that § 6501 says that § 6501(c)(1) says: “In the case of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time.” But, at a minimum, that would only apply where there was no regular assessment and presumably no RBA. Where there is a regular assessment, one might argue through inference that the regular assessment statute and its limitation period should apply.

Can Misleading but True Statements Be Prosecuted as Criminally False Statements Under 18 USC 1001(a)(2)? (3/27/25; 3/29/25)

In Thompson v. United States, ___ U.S. ___, ___ S.Ct. ___ (3/21/25), SC here and GS here, the Court held that the criminal conduct described in 18 U. S. C. §1014 relating to credit applications (“knowingly mak[ing] any false statement”) does not include misleading, but not false, statements. The opinion is relatively short, so because it is not encountered often in a tax context, I will just focus on the bottom-line holding in the prior sentence and ask that readers consider the related statute, 18 U. S. C. § 1001(a)(2), often appearing in tax prosecutions, that criminalizes “materially false, fictitious, or fraudulent statement[s].”

Does Thompson’s analysis mean that misleading statements cannot be prosecuted under § 1001(a)(2), often called the false statements crime?

The specific issue is not addressed directly in the DOJ Criminal Tax Manual Section 24.00, titled False Statements (18 U.S.C. § 1001), here. I direct readers’ attention to the discussion in Section 24.04, titled False Statements or Representations, starting on p. 4 and specifically to the discussion on p. 5 of Bronston v. United States, 409 U.S. 352 (1973), a perjury case holding that literally true but misleading statements under oath could not be prosecuted under the perjury statute. So, the question is whether literally true but misleading statements not under oath can be prosecuted under the false statements statute? As the CTM notes (p. 5), Bronston acknowledged a possible exception for a “criminally fraudulent statement” at p. 358 n. 4 as follows:

   n4 Petitioner's answer is not to be measured by the same standards applicable to criminally fraudulent or extortionate statements. In that context, the law goes "rather far in punishing intentional creation of false impressions by a selection of literally true representations, because the actor himself generally selects and arranges the representations." In contrast, "under our system of adversary questioning and cross-examination the scope of disclosure is largely in the hands of counsel and presiding officer." A. L. I. Model Penal Code § 208.20, Comment (Tent. Draft No. 6, 1957, p. 124).

Sixth Circuit Holds that Forfeited Deferred Compensation Account is Not Taxable to Defendant (3/27/25)

In Hubbard v. Commissioner, ___ F.4th ___ (6th Cir. 3/19/25), CA6 here and GS here, the Court held that the Government’s judicial forfeiture in a criminal case of a deferred compensation account—here a “simplified employee pension”—followed by distribution to the Government from the account did not give rise to taxable income to the defendant. The law is settled that the distribution from such an account to the employee or to another (including the IRS) to meet an obligation of the employee generates taxable income to the employee. The Court avoided that rule because the form of the forfeiture was that the account was forfeited to the Government rather than the proceeds of the account.

JAT Comments:

1. I think the Court focuses on formalities rather than substance. I suspect that the IRS applied the distribution proceeds in payment of the employee’s tax liability, thus giving the employee the benefit of the distribution, despite the fact that the distribution was formally to the Government rather than the employee. I assume that the IRS assessed the tax liability on the distribution as a restitution-based assessment and applied the payment to Hubbard’s account accordingly.

2. It may be in a defendant’s best interest to have a deferred compensation account treated as the income of the employee. That is because the distribution, if taxed to the defendant, will still result in an amount exceeding the tax liability on the amount(s) distributed that can then be applied to tax liability on other income. (I am not sure that, if the excess amount could have otherwise generated a refund (a phenomenon where restitution exceeds the defendant’s tax liability), the IRS could refund since it is part of the restitution.)

9th Circuit Holds that Law Firm Asserting a Fisher Privilege for Client Documents it Possesses that Are Potentially Subject to Fifth Amendment Privilege in Client's Hands Need Not Produce a Privilege Log (2/1/25; 3/31/25)

In In re Grand Jury Investigation, dated July 21, 2023, 127 F.4th 139 (9th Cir. 1/28/25), CA9 here and GS here, the grand jury subpoenaed a target of a grand jury investigation who invoked his Fifth Amendment privilege. The grand jury then subpoenaed a Law Firm for the target (“Client”) to produce records Client had delivered to the Law Firm in the context of receiving legal advice. Law Firm declined to produce asserting privilege. The Government moved to require Law Firm to provide a privilege log (sometimes called a Vaughn index) to help the government determine if the privilege was properly invoked. The district court required that the Law Firm give the privilege log. The client then immediately appealed under the Perlman doctrine permitting an immediate appeal rather than awaiting a contempt holding. See Perlman v. United States, 247 U.S. 7 (1918).The Ninth Circuit panel held (per the summary (similar to a Supreme Court Syllabus), Slip Op. 2-3)

In Fisher [Fisher v. United States, 425 U.S. 391 (1976)], the Supreme Court held that when the Fifth Amendment protects an individual from the compelled production of documents and the individual shares those documents with his attorney to obtain legal advice, the attorney-client privilege shields the attorney from compelled production of those documents to the government. But if the government can already independently determine the existence, authenticity, and client’s custody of those documents such that the act of producing them would reveal no additional incriminating information, the Fifth Amendment does not protect the individual against the documents’ production, and the Fisher privilege accordingly does not apply.

The panel held that an attorney cannot be ordered to provide the government with a privilege log of documents to which the Fisher privilege applies, and that to determine whether the requirements for Fisher protection are in fact satisfied, a district court will generally need to conduct an in camera review. Because the district court here ordered a privilege log to be provided to the Government without any such prior process, the panel reversed and remanded.

Schwarzbaum Redux – 11th Circuit Issues New Opinion to Correct Statement of FBAR Willfulness Civil Penalty Standard (1/23/25)

In United States v. Schwarzbaum, ___ F.4th ___ (11th Cir. 1/23/25), CA11 here and GS here [to come], the 11^th Circuit revisited the long-running Schwarzbaum FBAR civil penalty litigation. I discussed the immediately preceding visitation/opinion in 11th Circuit on Third Consideration Seals FBAR Willful Penalty Except for Relatively Small Amount Held Excessive Fine under 8th Amendment (Federal Tax Crimes Blog 9/4/24) here. In this new opinion, issued yesterday, the Court starts:

Appellee’s [United States’] petition for panel rehearing is GRANTED. We VACATE our prior opinion in this case and substitute the following in its place:

The Slip Opinion for the prior opinion was 53 pages; the Slip Opinion for this new opinion is 55 pages. For purposes of Federal Tax Crimes and Federal Tax Procedure Blogs, the material changes * only correct misstatements in the original opinion that the FBAR willfulness civil penalty standard is the same as the FBAR willfulness criminal penalty standard (the Cheek/Ratzlaf standard). (See new footnotes on p. 40 n. 7 and p. 46 n. 10.) As all readers of this blog surely know, the civil penalty standard includes recklessness but the criminal penalty standard requires the stricter specific intent requirement in Cheek and Ratzlaf. I don’t think that those corrections affect the bottom-line holdings, so I just copy and paste the succinct summary I provided in the original blog entry.

(1)  (a) held the FBAR civil willful penalties are “fines” within the meaning of the Eighth Amendment; (b) held the minimum $100,000 penalties applying to Schwarzbaum’s accounts with small amounts (those $16,000 or less) are disproportional and excessive; (c) held the penalties on the accounts with significantly larger amounts are not disproportional and thus not excessive; and (d) remanded to the district court to determine the effect of the $300,000 reduction required by the (1)(b) holding.

(2)   (a) rejected Schwarzbaum’s attack that, in a prior appeal, the court held the assessment was “arbitrary and capricious” and thus rendered the assessments invalid from inception; instead holding that the prior holding was that the assessment was “not in accordance with law,” a different standard under APA § 706(2)(A), requiring a remand to the IRS to fix the calculation mistake rather than wipe out the assessments; (b) rejected a related statute of limitations argument that the remand required a new out of time assessment, holding the issue had been decided against Schwarzbaum in an earlier appeal; (c) sustained a lower assessment rather than the correct assessment which would have been higher; and (d) held the district court properly remanded the case to the IRS and retained jurisdiction of the case to consider after the IRS recalculated the penalties.

Use of AI, Including Large Language Models (LLMs), in Tax Court Brief Writing (And Really Other Legal Analysis) (1/22/25)

I erroneously posted on the Federal Tax Crimes Blog a post that I should have posted on the Federal Tax Procedure Blog. I have deleted the content of the Federal Tax Crimes Blog post. To read the blog on the Federal Tax Procedure Blog, see Use of AI, Including Large Language Models (LLMs), in Tax Court Brief Writing (And Really Other Legal Analysis) (1/22/25), here.

New Information for Tax Conspiracy and Related Credit Suisse (through Successor UBS) Initiatives Re Violation of 2014 Plea Agreement (1/19/25)

In United States v. Rosenberg (S.D. FL No. 1:25-cr-20005, CL Dkt. Sheet here), the Government filed an Information with Trial Attorney Certificate, here, charging Gilda Beth Rosenberg (aka Gilda Rosemberg Percezek) with one count of conspiracy to defraud and commit offenses (i.e., both a defraud and an offense conspiracy in one count). Except for the large amounts involved, the allegations are not unusual for U.S. taxpayers who employed Swiss financial institutions to avoid their U.S. tax reporting and paying obligations. That the filing is an information with an attached Trial Attorney Certificate indicating that 0 days of trial is expected suggests that a plea deal has been reached, will be filed with the district court soon, and will be processed to sentencing in due course.

The Information names only one Swiss bank specifically--Union Bancaire Privee Bank. Another, unnamed Swiss bank is alleged to have held Rosenberg’s assets in an “insurance wrapper” account, described as “an investment account around which was wrapped a life insurance policy.” (I don’t know recall the precise tax gambit for such insurance wrappers with life insurance but I assume that it relates at least in part to the nontaxability of life insurance proceeds thus potentially cleansing unreported income behind the “insurance” proceeds.)

Credit Suisse appears to have been somewhere in the mix, perhaps with the insurance wrapper account. Credit Suisse earlier ran afoul of U.S. tax authorities and reached a deal in 2014 to plead guilty to a U.S. tax crime, pay $2 billion, and identify U.S. taxpayers it assisted evade tax.  Credit Suisse Pleads to One Count of Conspiracy to Aiding and Assisting (Federal Tax Crimes Blog 5/19/14; 5/20/14), here. Credit Suisse then apparently breached that deal by not disclosing some U.S. taxpayers (including allegedly Rosenberg). (The amount Credit Suisse paid under the 2014 deal is variously reported but according to my discussion in that blog, the documents indicate the resolution cost Credit Suisse $2 billion.)

Two Recent Tax Crimes Cases Involving Bitcoin (1/19/25; 2/9/25)

See the additional items below added on 2/9/25.

In my immediately preceding post (2 days ago) on the indictment of Tom Goldstein, I mentioned that among the allegations were allegations that Goldstein had not properly reported his cryptocurrency transactions. I said that I would post some other recent items involving cryptocurrency. These recent items involve Bitcoin, perhaps the most prominent type of cryptocurrency. Goldstein’s indictment does not specify the type of cryptocurrency he allegedly used.

Ahlgren 

In United States v. Ahlgren ((W.D. TX No. 1:24-cr-00031) [CL has two docket sheets here and here with some documents available by checking both sheets], the defendant allegedly failed to report major income from Bitcoin transactions and allegedly certain other cryptocurrency including Bitcoin Cash, Bitcoin Gold, Etherium [Ethereum], and Litecoin. Ahlgren was indicted on seven counts of filing false tax returns and structuring deposits to evade currency transaction reporting requirements. Ahlgren was detained pending trial. (See Dkt. Entry 15 dated 4/9/2024 titled Order of Detention Pending Trial, here; Dkt Entry 22 dated 4/25/24 titled Government’s Advisory to the Court Regarding Detention Remand, here; and Dkt Entry 24 dated 4/22/24 and titled Order, here) Pretrial Detention is unusual in tax crimes cases.

Ahlgren thereafter pled guilty to one count of tax perjury, § 7206(1), and sentencing judgment was accordingly entered. (See Dkt Entry 45 dated 12/13/24 titled Judgment in A Criminal Case, here.) The count of conviction under the plea was a single count with a maximum three-year sentence. The Court sentenced Ahlgren to 24 months incarceration which would permit, with good time credit, a sentence served of less than 24 months. The Court imposed restitution of $1,095,031 which presumably is the unpaid criminal tax loss. Although restitution is not normally imposed in tax cases, it can be imposed if agreed in the plea agreement. This restitution is the amount that the IRS can assess without further ado under the restitution-based assessment (“RBA”) procedures. See §§ 6201(a)(4) & 6213(b)(5). The IRS may further audit Ahlgren's tax liabilities and assert more tax but will have to proceed under the deficiency procedures.

Further, shortly after sentencing, the Court entered a restraining order (See Dkt. Entry 50 dated 1/6/25 titled Restraining Order, here) requiring Ahlgren to

Tom Goldstein--SCOTUSblog founder, Prominent Supreme Court Advocate, and High-Stakes Gambler--Indicted for Tax and Related Crimes and False Statements to Mortgage Lenders (1/17/25; 1/19/25)

Yesterday's big news in tax crimes was the indictment of Tom Goldstein, the co-founder of SCOTUSblog, a big-time Supreme Court advocate, and high-stakes gambler. The indictment lays out  major and many crimes including

• tax crimes (evasion § 7201, aiding and assisting § 7206(2), willful failure to pay tax § 7203)
• aiding and abetting 18 U.S.C. § 2) and 
• mortgage-related crimes (including false statements 18 USC § 1014) and 
• seeks forfeiture for mortgage-related crimes. 

A significant feature is Goldstein’s apparent addiction to high-stakes gambling and to other vices, which may include metaphorically wine, women, and song (with emphasis on women).

For those interested in delving deeper into the details, I provide a link to the indictment along with some of the more insightful articles on the subject. This will allow readers to pursue the matter further as they wish.

Links:

• Indictment, CL here. (The CL docket sheet is here, although it is sparsely populated with only the indictment now.)
• David Lat, SCOTUSblog Founder Tom Goldstein Hit With 22-Count Federal Indictment (Original Jurisdiction 1/17/25), here.
• Amanda Robert and Lee Rawles, SCOTUSblog founder Tom Goldstein faces tax evasion charges (ABA Journal 1/16/25), here.
• Francis Chung, Supreme Court blog publisher Tom Goldstein, a high-stakes poker player, indicted on tax charges (Politico with Associated Press 1/16/25), here.
• Added 1/19/25 1pm: Dan Morse, Supreme Court attorney who founded SCOTUSblog is charged in tax case (WAPO 1/17/25), here.

In the pattern of conduct for tax evasion, the indictment alleges cryptocurrency tax violations. (See ¶ 21, 24.n., 70-72, 81, & 83; there have been some other relatively recent cryptocurrency tax crimes items that I have been meaning to blog, but I will do that later, perhaps this weekend.)

My editorial comment is that the pattern of conduct alleged shows amazing hubris or chutzpah or some type of pervasive psychological or antisocial disorder.

Added 1/17/25 3:55pm: One comment I read on one blog write-up was that this case is ripe for a good storyteller such as Michael Lewis to write a book that should be a  bestseller.