Opinion ID: 725002
Heading Depth: 2
Heading Rank: 1

Heading: Review of Language and Commentary

Text: 17 Interpretation of the Guidelines is similar to statutory construction. See United States v. Kirvan, 86 F.3d 309, 311 (2d Cir.1996). We begin with the language of U.S.S.G. § 2T1.1, which provides the sentencing rules for tax-evasion offenses. After explaining how the base offense level is calculated, it establishes two enhancements for Specific Offense Characteristics. The enhancement relevant to this appeal, § 2T1.1(b)(2), states that [i]f sophisticated means were used to impede discovery of the nature or extent of the offense, increase [the offense level] by 2 levels. 18 The United States Sentencing Commission (Commission), author of the Guidelines, provided commentary explaining this subsection. In analogizing the Guidelines to legislative rules adopted by federal agencies, the Supreme Court has compared the Commission's commentary to an agency's interpretation of its own legislative rules. Stinson v. United States, 508 U.S. 36, 45, 113 S.Ct. 1913, 1919, 123 L.Ed.2d 598 (1993). As such, this commentary should be given 'controlling weight unless it is plainly erroneous or inconsistent with the regulation,'  id. (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700 (1945)), and we must accord it a significant role in our construction of § 2T1.1. Should the commentary contradict the provision's text, the provision's plain language of course controls. The commentary to § 2T1.1 states that 19 Sophisticated means, as used in § 2T1.1(b)(2), includes conduct that is more complex or demonstrates greater intricacy or planning than a routine tax-evasion case. An enhancement would be applied for example, where the defendant used offshore bank accounts, or transactions through corporate shells. 20 U.S.S.G. § 2T1.1(b)(2), comment. (n.6). The Commission added that while tax evasion always involves some planning, unusually sophisticated efforts to conceal the evasion decrease the likelihood of detection and therefore warrant an additional sanction for deterrence purposes. U.S.S.G. § 2T1.1, comment. (backg'd). 21 The commentary furnishes three principal thoughts. First, the provision targets conduct that is more complex, demonstrates greater intricacy, or demonstrates greater planning than a routine tax-evasion case. This test is disjunctive, that is, the relevant conduct need only satisfy one of these requirements. Second, the 1992 commentary offers two examples of covered conduct--the use of offshore bank accounts or the use of corporate shells. The most current version of this commentary adds a third example, the use of fictitious entities. See United States Sentencing Commission, Guidelines Manual § 2T1.1, comment. (n.4) (Nov.1995) (1995 U.S.S.G.). This language was added in a 1993 amendment to the Guidelines. See United States Sentencing Commission, Guidelines Manual App. C amend. 491, at 328, 333 (Nov.1993). While this amendment does not control the instant case because it was not part of the 1992 Guidelines, it may be considered where it clarifies and simplifies the subject at issue and makes no substantial change to the Guidelines. United States v. Hendrickson, 26 F.3d 321, 330 n. 6 (2d Cir.1994); see also United States v. Colon, 961 F.2d 41, 45 (2d Cir.1992) (indicating that clarifying amendments might be relevant). 22 Third, the commentary explains that the section is designed to increase punishment in those cases that, because of their sophistication, might be harder to detect and therefore require additional punishment for heightened deterrence. See U.S.S.G. § 2T1.1, comment. (backg'd). The Commission also observed that [b]ecause of the limited number of criminal tax prosecutions relative to the estimated incidence of such violations, deterring others from violating the tax laws is a primary consideration underlying these guidelines. U.S.S.G. ch. 2, pt. T1, intro. comment. These observations make clear that deterrence is the section's animating policy. We construe it with this in mind.