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Tax Violations

NCJ Number
American Criminal Law Review Volume: 45 Issue: 2 Dated: Spring 2008 Pages: 995-1037
Jarret Jacinto; James Fitzmaurice
Date Published
43 pages
This article discusses the elements, defenses, and sentencing for various criminal violations under the U.S. Internal Revenue Code (I.R.C.), sections 7201, 7202, 7203, 7206, and 7212(a).
Section 7201 requires the prosecution to show a tax deficiency, an affirmative act of evasion or attempted evasion of the tax, and willfulness. Defenses are lack of deficiency, lack of willfulness, third-party liability or reliance, and selective prosecution. Section 7202 criminalizes employers' willful failure to collect any tax required under the I.R.C. and willful failure to account truthfully for and pay the tax withheld from employees' pay. Defenses to charges under section 7202 include lack of knowledge of the illegal nature of the activity and inability to pay. Section 7203 makes it a misdemeanor to willfully fail to pay a required tax, file a return, keep legally required tax records, or supply required tax-related information. Defenses may be reliance on counsel or an accountant to negate willfulness. A good-faith claim of privilege under the fifth amendment (right not to make self-incriminating statements) may also be used. Section 7206 makes it a violation for taxpayers to file false documents willfully or to assist others in doing so. The most effective defenses focus on showing the charge action was not willful. Section 7212(a) criminalizes attempts to interfere with the administration of internal revenue laws through corrupt or forcible acts. Defenses are to negate the fact of coercion or threats and unawareness of a pending IRS action. The article also discusses IRS policies and procedures in investigating violations under the aforementioned laws, as well as sanctions under the U.S. Sentencing Guidelines. The article concludes with a review of the elements, defenses, and statute of limitations under 18 U.S. Code section 371, which pertains to conspiracies related to tax issues. 302 notes


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