Supreme Court will determine overreaching claim in a tax case

As many in Minnesota know, a number of crimes are associated with filing a tax return. It can be a crime to willfully fail to file a return, knowingly file a fraudulent return and obstruct justice during an investigation. However, the Supreme Court will now determine whether destroying business records without an ongoing investigation or audit can be considered obstruction of justice.

In a case before the Court, a businessman from New York is claiming that the IRS overstepped its bounds in seeking conviction for obstruction of justice. The man had failed to file a return for over 17 years. He also destroyed business records for the past and paid his employees in cash, systemically destroying records in the process. Though investigated in 2004, the IRS dropped the probe. He claimed he wasn't aware of the investigation.

However, the IRS renewed the investigation and charged him with eight counts of failing to file a tax return. In addition, the IRS charged him with obstruction of justice by destroying business records. The obstruction charge is a felony, as opposed to the rest, which were misdemeanor charges. He was convicted on all counts and sentenced to jail time.

He appealed the obstruction conviction, claiming that if he didn't know of an investigation, he could not have obstructed justice. According to the obstruction statute 26 U.S.C. 7212(a), obstruction is an 'endeavor(s) to intimidate or impede any officer or employee of the United States acting in an official capacity under this title."

The power of the IRS is well known, as is their ability to prosecute for violations of the Internal Revenue Code. However, some in the criminal defense area believe the IRS may be granted too much power to prosecute for acts performed without knowledge or an IRS investigation. A person facing an investigation for a potential violation of tax laws may wish to consult an attorney to help guide them through the process.

No Comments

Leave a comment
Comment Information

We Can Help. Contact Us.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Groshek Law PA
530 N 3rd St.
Suite 310
Minneapolis, MN 55401

Phone: 612-424-5829
Phone: 612-424-5829
Minneapolis Law Office Map

Call for a consultation