Source: http://www.ft-lauderdale-tax-lawyer.com/blog/2017/06/10/court-finds-criminal-offense-us-residents-willful-failure-file-fbar-was-not-unconstitutionally-vague/
Timestamp: 2019-04-20 16:23:02+00:00

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Written by David on June 10, 2017 in Tax Audits, Appeals & Litigation.
Last update on June 10, 2017 .
Have Tax Treaties Rendered Reporting Laws Unconstitutionally Vague?
The United States has entered tax treaties with selected individual countries. Certain taxpayers who are citizens of foreign countries also have green cards granting them resident status in the United States. Mr. Little argued that the tax laws and tax treaties created ambiguities in the law that were so vague that they did not give a person fair notice as to what conduct constituted a crime.
The Court considered this issue in the case of United States v. Little, 2017 U.S. Dist. LEXIS 67580 (S.D. N.Y. 2017).
The Court stated that the void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement." United States v. Rybicki, 354 F.3d 124, 129 (2d Cir. 2003) (quoting Kolender v. Lawson, 461 U.S. 352, 357, 103 S. Ct. 1855, 75 L. Ed. 2d 903 (1983)).
The Court found that since the First Amendment was not implicated, the Court was required to assess Little's challenge as applied, i.e., in light of the specific facts of the case at hand and not with regard to the statute's facial validity. (quoting United States v. Nadi, 996 F.2d 548, 550 (2d Cir. 1993)).
Courts examine “as-applied” vagueness claims in two steps: a court must first determine whether the statute gives the person of ordinary intelligence a reasonable opportunity to know what is prohibited and then consider whether the law provides explicit standards for those who apply it. See, Rubin v. Garvin, 544 F.3d 461, 468 (2d Cir. 2008) (quoting Farrell v. Burke, 449 F.3d 470, 486 (2d Cir. 2006)). The "novelty" of a prosecution does not bolster a vagueness challenge, for the lack of a prior litigated fact pattern that is precisely on point is immaterial. See, United States v. Kinzler, 55 F.3d 70, 74 (2d Cir. 1995).
The Effect of the Willfullness Requirement.
The Court held that a reviewing court must conduct separate inquiries into the underlying statutes and regulations and then into the statutes imposing criminal penalties for certain types of violations of these statutes and regulations.
The Court found that the U.S. statutes and regulations that require alien lawful permanent residents (green card holders) to either (a) file a tax return and pay taxes on worldwide income, or (b) file a tax return reporting worldwide income and indicate that he or she is taking a particular protection under the Treaty, were not unconstitutionally vague as applied.
The Court also found that the statutes providing for criminal sanctions against individuals who violate these obligations are not vague as applied to alien lawful permanent residents.
Is there any set of facts in which a tax treaty could render existing criminal law unconstitutionally vague?
← The Applicable Federal Sentencing Guideline for a Violation of Internal Revenue Code Section 7212.

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