Court Opinion

ID: 9481721
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:29:18.669536+00
Date Added: 2024-06-11T17:48:31.690781
License: Public Domain

K.K. HALL, Circuit Judge,
concurring in part and dissenting in part:
I concur in and join all parts of the majority opinion except Part 11(G). The majority permits the appellants to profit from their own wrongdoing by offsetting unreported individual income with income fraudulently and illegally reported on the trust returns. The appellants encouraged investors to hide their personal income behind fictional business entities, argue on this appeal that the entities were not fictions, and yet have convinced the majority to treat them as fictional for purposes of sentencing.
Though the Sentencing Commission chose, perhaps unfortunately, to call its calculation “tax loss,” it defined its calculation in terms of false statements. “Tax loss” is not intended to be an accurate accounting of the government’s revenue deprivation:
In order to gauge the seriousness of these offenses, the guidelines establish a rule for determining a “tax loss” based on the nature and magnitude of the false statements made. Use of this approach also avoids complex problems of proof and invasion of privacy when returns of *1454persons other than the defendant and co-defendants are involved.
Commentary, U.S.S.G. § 2T1.3.
The commentary to U.S.S.G. § 2T1.9 also notes that “[a tax fraud conspiracy] typically is complex and may be far-reaching, making it quite difficult to evaluate the extent of the revenue loss caused.”
The Commission’s concerns are strikingly illustrated by this case. The appellants sold at least twenty UBOs, but the “tax loss” calculation used by the district court was based on only nine investors’ returns. The extent of the revenue loss may never be known with any degree of precision. The majority opinion, aside from its rewarding the defendants the fruits of the fraud, creates the problems of proof the guidelines meant to avoid.
I respectfully dissent.