Source: http://federaltaxcrimes.blogspot.com/2015/08/doj-and-court-of-appeals-confuse-causer.html
Timestamp: 2018-01-17 08:47:31
Document Index: 350827851

Matched Legal Cases: ['§ 287', '§ 2', '§ 287', '§ 2', '§ 287', '§ 2', '§ 2', '§ 2', '§ 2', 'art 07', 'art 2', '§ 7201', '§ 287', '§ 2']

Federal Tax Crimes: DOJ and Court of Appeals Confuse Causer Liability under 18 USC § 287 (8/1/15)
The government prosecuted Johnson on a theory that she caused Fine-Kennedy to take an act that would have been an offense if performed by Johnson herself. See 18 U.S.C. § 2(b). The offense of making a false claim upon the United States required proof that a person made or presented a claim to the Internal Revenue Service, knowing that the claim was false, fictitious, or fraudulent. 18 U.S.C. § 287; see United States v. Miller, 728 F.3d 768, 774 (8th Cir. 2013). In this case, the jury was instructed that the government must prove that "Johnson caused to be made to the Internal Revenue Service a claim for a tax refund." The instructions explained that "[a] person makes a claim against the Internal Revenue Service when she files or submits, or causes to be filed or submitted, a tax return requesting a refund of withheld income tax, either for herself or for other persons."
That Fine-Kennedy physically mailed the return and also knew about the fraudulent scheme does not preclude a finding that Johnson caused the filing. Johnson admitted that Fine-Kennedy was her client and that she prepared Fine-Kennedy's fraudulent tax return. Johnson accepted payment from Fine-Kennedy for the completion of her fraudulent tax return. Johnson knew that Fine-Kennedy would submit the return to the government for a refund. Even though Fine-Kennedy ultimately submitted the false return to the IRS, the jury could still find that Johnson caused the submission of a false statement through an intermediary. United States v. Hebeka, 89 F.3d 279, 283-84 (6th Cir. 1996); United States v. Blecker, 657 F.2d 629, 631-34 (4th Cir. 1981). Fine-Kennedy's act of submitting the return to the government "was clearly understood and foreseen" by Johnson when she prepared the false return, and a reasonable jury thus could find that Johnson "caused" the return to be presented within the meaning of § 2(b). See United States v. Murph, 707 F.2d 895, 896 (6th Cir. 1983) (per curiam).
I think the Court got that wrong as presented. In the context of a false return making a false claim prosecutable under § 287, the taxpayer can be either guilty of the crime or innocent of the crime (because lacking the requisite mens rea). This is a critical distinction because it determines the criminal statutes under which a preparer may be charged. If the taxpayer has the requisite mens rea and commits the actus reus (signing and filing the false return), then the preparer assisting in that crime is an aider and abettor under 18 USC § 2(a). The preparer is not a causer of the crime. The taxpayer caused the crime and the preparer aided and abetted the taxpayer in committing the crime.
If, however, the taxpayer did not commit the crime (i.e., signed and submitted the false return but without the mens rea to commit the crime), the preparer preparing the false return is then not an aider and abettor under § 2(a) but is instead a causer under § 2(b). In other words, for guilt under § 2(b) the "causer" must cause an innocent party to commit the physical acts (actus reus) of the crime. I have developed these arguments in an article: Townsend, John A., Theories of Criminal Liability for Tax Evasion (May 15, 2012). Available at SSRN: http://ssrn.com/abstract=2060496 or http://dx.doi.org/10.2139/ssrn.2060496. I also addressed the issue in some blogs, the principal ones are: Even More on Principals, Accomplices, Causers and Pinkerton Conspirators - the Daugerdas Case (Federal Tax Crimes Blog 5/10/11), here; and Daugerdas Retrial Jury Instructions - Part 07 Tax Evasion Instructions Part 2 Tax Evasion and Conspiracy to Commit Tax Evasion - Derivative Liabilities (Federal Tax Crimes Blog 11/25/13), here.
Just for completeness, as noted in the materials I link above, there are some crimes that the Government attempts to bootstrap with causer liability. For example, tax evasion under § 7201 is not limited to the taxpayer (as is 18 USC § 287). An enabler such as a preparer can be directly liable for tax evasion without any derivative liability through either part of 18 USC § 2. The derivative liability provisions are designed to convict someone -- treat them as a principal -- when the person is not otherwise directly guilty of the crime.