Source: http://federaltaxcrimes.blogspot.com/2013/05/can-tax-evasion-be-misdemeanor-52113.html
Timestamp: 2015-01-30 17:00:55
Document Index: 534107830

Matched Legal Cases: ['§ 7203', '§ 7203', '§ 7203', '§ 7302', '§ 7203', '§7201', '§ 7203', '§ 7203']

Federal Tax Crimes: Can Tax Evasion Be a Misdemeanor? (5/21/13)
Defendant next argues that the Memorandum Opinion incorrectly asserts that he is being prosecuted for wilfully failing to "pay" his taxes when, in fact, the Information charges that he willfully failed to "file" his tax return. n2 (Doc. #55 at 2) (filed under seal). Indeed, Defendant further asserts, he had actually filed and paid his 2005, 2006, and 2007 tax returns on October 13, 2010. (Id.). Defendant's argument does not hold water.
n2 Whether a person can pay his taxes without filing a tax return is a question the court will leave for philosophers to resolve. The Information clearly and explicitly charges Defendant with three violations of 26 U.S.C. § 7203. (Doc. #1 at 1-3). The relevant provisions of the statute state that: Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor... 26 U.S.C. § 7203 (emphasis added). As the statute makes clear, Defendant is charged with willfully failing to pay his taxes. Furthermore, whether Defendant, in October 2010, paid taxes that were years overdue is irrelevant; he is required by statute to have paid them at the time or times required by law or regulations.
I avoid the use of the term "misdemeanor tax evasion," because I think it is confusing. Here is the short discussion I just added as a footnote in my Federal Tax Crimes book:
In this regard, some courts described the § 7203 failure to pay crime as “misdemeanor tax evasion.” E.g., United States v. Thompson, 518 F.3d 832, 865-866 (10th Cir. 2008). So long as the misdemeanor description accompanies “tax evasion” when referring to § 7302, I suppose that description is harmless. I think most practitioners and courts refer to the § 7203 crime as failure to pay (or file, as appropriate) rather an as “misdemeanor tax evasion,” and refer to the crime in §7201 as tax evasion. In other words, when they say tax evasion, they mean the felony crime of tax evasion and adding felony would be redundant in the common understanding. So, I think it breeds confusion to speak of the § 7203 offense of failure to pay as “misdemeanor tax evasion.” In any event, so long as it is clear that § 7203 is being referenced, referring to the crime as “misdemeanor tax evasion” is harmless. See United States v. Lyerly, 2013 U.S. Dist. LEXIS 67588 (ND AL 2013).
Mike FlynnMay 21, 2013 at 8:12 PMDescribing "willful failure to pay taxes" as "misdemeanor tax evasion" is egregious error. A "tax evasion" (of payment, as opposed to assessment, for this discussion) conviction implies the defendant committed an affirmative evasive act. To the contrary, a "failure to pay" tax (even willfully) conviction implies the defendant did NOT commit an affirmative evasive act, but rather that he refused to act. As a tax crime, one's committing an affirmative act of evasion is deemed more harmful to the tax system than one's failing to pay a tax. That is why tax evasion is a felony, and why willful failure to pay a tax is a misdemeanor. The district court should amend its order forthwith.ReplyDeleteMike FlynnMay 21, 2013 at 8:55 PMThis is no academic exercise; the district court committed egregious error. A "tax evasion" (for this discussion, of payment rather than of assessment) conviction implies the defendant affirmatively attempted to evade a tax payment. In stark contrast, a "willful failure to pay tax" conviction implies only that the defendant refused (or neglected) to take tax payment action. Our tax system regards one's commission of an affirmative tax evasion attempt as more serious than one's failure to pay a tax. That is why tax evasion is a felony and willful failure to pay tax only a misdemeanor. One is not, as the post implies, a lesser included offense of the other. The district court should revise its order immediately.ReplyDeleteBiggerFatterPoliticsDecember 7, 2014 at 12:24 AMHow To LEGALLY Avoid Paying Sales Tax State Income Tax and Most Federal Taxes CLICK HERE for FREE adviceThis is a parody article but the advice is real.ReplyDeleteAdd commentLoad more...