Opinion ID: 563204
Heading Depth: 2
Heading Rank: 4

Heading: The Vagueness and High Debatability of the Law Regarding UBOs

Text: 49 Here appellants sought to depend on United States v. Critzer, 498 F.2d 1160 (4th Cir.1974), in which we held that when [a] law is vague or highly debatable, a defendant--actually or imputedly--lacks the requisite intent to violate it. Id. at 1162. 50 Appellants have maintained that the government can point to no statute, regulation, or court decision that could have served to give appellants fair warning that the sale of UBOs was criminal, because here questions of tax liability revolved around the subsequent taking of deductions against income generated by the UBOs, an area of the law supposedly riddled by vague and highly debatable interpretations of such portions of the tax code as those permitting the deduction of meals and lodging expenses, 26 U.S.C. Sec. 119, and the deduction for ordinary and necessary business expenses, id. at Sec. 162. 51 Here again, appellants have sought to divert attention away from the well-settled law of what constitutes tax evasion and into the misty realm of UBOs and deductions against personal income. By properly focusing on pertinent tenets of tax law--that earned income is taxable to those who earn it and that dominion and control over property, rather than documentary title, determines to whom the income from that property is taxable--one discovers a number of cases. See Holman v. Holman, 728 F.2d 462 (10th Cir.1984) (assignment of income doctrine and grantor trust provisions applied to hold trusts mere shams for tax avoidance purposes); Hanson v. Commissioner, 696 F.2d 1232 (9th Cir.1983) (same); Schulz v. Commissioner, 686 F.2d 490 (7th Cir.1982) (same); Vnuk v. Commissioner, 621 F.2d 1318 (8th Cir.1980) (same); Wesenberg v. Commissioner, 69 T.C. 1005 (1978) (same); Zmuda v. Commissioner, 731 F.2d 1417 (9th Cir.1984) (investors, as trustees, had complete control over the income-producing property of the trusts). 4 Hence, contentions of vagueness and debatability simply do not hold up. 52