The Supreme Court of the United States (SCOTUS) has agreed to hear a case that aims to clarify when a taxpayer’s actions are paramount to an obstruction of justice.
The case involves a man that was convicted for a failure to file tax returns. In addition to failing to file the necessary paperwork with the Internal Revenue Service (IRS), the man also destroyed bank statements and other relevant documents. According to lower courts, these actions were enough to support a conviction for obstruction of justice.
The taxpayer conceded that he failed to file tax returns and that he paid all employees in cash to avoid filing income tax documents. However, he contests the allegations that his getting rid of bank statements and other business documents was enough to support a claim for obstruction of justice. He argues that the court should have required the government establish that he was aware of an ongoing IRS investigation at the time he destroyed these records. The lower court disagreed.
The decision by SCOTUS on this issue will impact others under investigation by the IRS and accused of obstruction of justice.
What is a tax obstruction of justice charge? As noted in a recent piece in the New York Times, an obstruction of justice charge basically involves any action or conduct that is viewed to impact the “due administration of justice.” Obstruction of justice charges involving tax crimes are particularly tricky because there is not clear language as to whether or not the IRS must be conducting an investigation at the time the questionable action occurred in order to support the charge.
In this case, the lower courts found that a violation of the law occurred whenever there was an “interference with an official effort to administer the tax code, and not merely a known IRS investigation.” Critics of this interpretation voice concern that it is too broad, noting it sets the courts up for future issues for “prosecutorial abuse.”
Why should I care if I face this charge? Although it is currently unclear how the nation’s highest court will rule in this specific case, it is important that people realize the serious nature of this type of charge. This charge is a serious offense, generally a felony. In the case under review, this single charge alone could result in three years of prison time.
Anyone that is facing this or similar tax controversy charges from the IRS should take the allegations seriously. Experienced legal counsel can help to build a case to protect your interests. In the event you are approached by an IRS agent inquiring about failure to file or any other aspect of taxation of your business, you should speak with an experienced criminal tax lawyer lilke those at Robert J. Fedor Esq., LLC. In that way, your rights will be protected and you can begin the process of resolving outstanding income tax problems with the IRS.
