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July 1994
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1.01 TAX DIVISION AUTHORITY 1-1
1.02 CRIMINAL ENFORCEMENT SECTIONS ORGANIZATION CHART 1-3
1.03 CRIMINAL ENFORCEMENT SECTIONS -- DELEGATION OF AUTHORITY 1-5
2.00 CRIMINAL TAX PRACTICE AND PROCEDURES
(UNITED STATES ATTORNEYS' MANUAL)N.B. The section references in this table of contents correspond to the references in the United States Attorneys' Manual (Title 6) dealing with the Tax Division.
6-1.000 POLICY 2-3
6-1.100 DEPARTMENT OF JUSTICE POLICY AND RESPONSIBILITIES 2-3
6-1.110 Other Relevant Manuals for U.S. Attorneys 2-4
6-4.000 CRIMINAL TAX CASE PROCEDURES 2-5
6-4.010 The Federal Tax Enforcement Program 2-5
6-4.020 Criminal Tax Manual and Other Tax Division Publications 2-5
6-4.030 Criminal Tax Materials on JURIS 2-5
6-4.100 INVESTIGATIVE AUTHORITY AND PROCEDURE 2-6
6-4.110 IRS Administrative Investigations 2-6
6-4.111 Origin of IRS Administrative Investigations 2-6
6-4.112 IRS Joint Administrative Investigations 2-7
6-4.113 IRS Review of Administrative Investigations 2-7
6-4.114 IRS Referral of Reports and Exhibits from Administrative Investigations 2-7
6-4.115 Effect of IRS Referral on Administrative Investigations 2-7
6-4.116 Effect of Declination on Administrative Investigations 2-7
6-4.117 General Enforcement Plea Program 2-8
6-4.120 Grand Jury Investigations 2-8
6-4.121 IRS Requests to Initiate Grand Jury Investigations 2-9
6-4.122 U.S. Attorney Initiated Grand Jury Investigations 2-10
6-4.123 Joint U.S. Attorney-IRS Request to Expand Tax Grand Jury Investigations 2-13
6-4.124 Strike Force Requests 2-13
6-4.125 Drug Task Force Requests 2-13
6-4.126 Tax Division Requests 2-13
6-4.127 IRS Transmittal of Reports and Exhibits from Grand Jury Investigations 2-13
6-4.128 IRS Access to Grand Jury Material 2-14
6-4.129 Effect of DOJ Termination of Grand Jury Investigation and IRS Access to Grand Jury Material 2-14
6-4.130 Search Warrants 2-14
6-4.200 PROSECUTORIAL AUTHORITY AND PROCEDURES 2-15
6-4.210 Tax Division Responsibility 2-15
6-4.211 Tax Division Jurisdiction 2-15
6-4.211(1) Filing False Tax Returns: Mail Fraud Charges or Mail Fraud Predicates for RICO 2-15
6-4.212 Delegation of Authority Within the Criminal Section 2-17
6-4.213 Review 2-17
6-4.214 Conferences 2-19
6-4.215 Expedited Review 2-19
6-4.216 Priority Review 2-20
6-4.217 On-Site Review 2-20
6-4.218 Authorizations and Declinations 2-20
6-4.219 Assistance of Criminal Section Personnel 2-20
6-4.240 U.S. Attorney's Responsibilities 2-20
6-4.241 Review of CRLs 2-20
6-4.242 Recommendation of Grand Jury Investigation 2-21
6-4.243 Review of Direct Referral Matters 2-21
6-4.244 Review of Noncomplex Matters 2-22
6-4.245 Request to Decline Prosecution 2-22
6-4.246 Request to Dismiss Prosecution 2-23
6-4.247 U.S. Attorney Protest of Declination 2-23
6-4.248 Status Reports 2-23
6-4.249 Return of Reports and Exhibits 2-24
6-4.270 Criminal Division Responsibility 2-24
6-4.300 TAX DIVISION POLICIES REGARDING CASE DISPOSITION AND SENTENCING 2-24
6-4.310 Major Count(s) Policy/Plea Agreements 2-24
6-4.320 Nolo Contendere Pleas 2-26
6-4.330 Alford Pleas 2-26
6-4.340 Sentencing 2-27
6-4.350 Costs of Prosecution 2-27
6-4.360 Compromise of Criminal Liability/Civil Settlement 2-28
6-4.310 Major Count Bluesheet (12/17/90) 2-29
3.00 TAX DIVISION POLICY DIRECTIVES AND MEMORANDA
TAX DIVISION POLICY DIRECTIVES AND MEMORANDA 3-1
TAX DIVISION DIRECTIVE NO. 52 3-3
ATTACHMENT 3-5
BRIEF MEMORANDUM OF LAW CONCERNING SEARCH WARRANTS 3-7
TAX DIVISION DIRECTIVE NO. 86 - 58 3-9
TAX DIVISION DIRECTIVE NO. 86-59 TAX VIOLATIONS 3-11
TAX DIVISION DIRECTIVE NO. 87 - 61 DELEGATION OF
AUTHORITY FOR TAX PROSECUTIONS INVOLVING RETURNS UNDER 26 U.S.C. § 6050I 3-15
TAX DIVISION DIRECTIVE NO. 70 3-17
TAX DIVISION DIRECTIVE NO. 71 3-19
TAX DIVISION DIRECTIVE NO. 75 MARCH 21, 1989 MODIFICATION OF POLICY RE USE OF 26 UNITED STATES CODE § 7207
IN FALSE RETURN FILING CIRCUMSTANCES 3-25
TAX DIVISION DIRECTIVE NO. 77 SECTION 7212(a) POLICY STATEMENT 3-29
MEMORANDUM (TAX INFORMATION ABOUT PROSPECTIVE JURORS:
IMPACT OF THE HASHIMOTO DECISION ON CRIMINAL TAX
PROSECUTIONS) 3-31
TAX DIVISION DIRECTIVE NO. 96 DELEGATION OF AUTHORITY
TO AUTHORIZE GRAND JURY INVESTIGATIONS OF FALSE AND
FICTITIOUS CLAIMS FOR TAX REFUNDS 3-35
INTERPRETATION OF TAX DIVISION DIRECTIVE NO. 96 3-37
BLUESHEET CONCERNING PLEA PROCEDURES 3-39
NONFILER INITIATIVE 3-41
TAX DIVISION VOLUNTARY DISCLOSURE POLICY 3-43
LESSER INCLUDED OFFENSES IN TAX CASES 3-46
POLICY CHANGE IN TAX CASES INVOLVING LESSER INCLUDED
OFFENSES 3-50
TAX DIVISION DIRECTIVE NO. 99 3-52
CIVIL SETTLEMENTS IN PLEA AGREEMENTS 3-56
4.01 VOLUNTARY DISCLOSURE 4-1
4.01[1] Policy Respecting Voluntary Disclosure 4-1
4.01[2] Timeliness of Disclosure 4-2
4.01[3] Cooperation of Taxpayer 4-3
4.02 DUAL PROSECUTION AND SUCCESSIVE PROSECUTION 4-4
4.02[1] Applicability of Policy 4-4
4.02[2] Tax Prosecutions 4-6
4.02[3] Pretrial Diversion 4-7
4.03 INCARCERATED PERSONS 4-7
4.03[1] General 4-7
4.03[2] Prosecution of Incarcerated Persons 4-8
4.04 HEALTH POLICY 4-10
4.04[1] General Policy 4-10
4.04[2] Court Determination of Health Status 4-11
4.05 MENTAL INCOMPETENCY 4-11
4.05[1] Evaluation at Administrative Level 4-11
4.05[2] Insanity Defense Reform Act of 1984 4-12
4.06 SEARCH WARRANTS 4-13
4.06[1] Generally 4-13
4.06[2] Procedures Under Directive No. 52 4-14
4.07 APPEALS 4-15
4.08 REQUESTS FOR TRIAL ASSISTANCE 4-17
4.09 STATUS REPORTS 4-17
4.10 RETURN OF REPORTS AND EXHIBITS 4-18
5.00 PLEAS AND SENTENCING: TAX DIVISION POLICY AND GUIDELINES
5.01 GENERALLY 5-1
5.02 GENERAL APPLICATION PRINCIPLES 5-2
5.02[1] Select the Appropriate Guidelines Manual 5-2
5.02[2] Guideline Calculation 5-3
5.03 CALCULATING THE BASE OFFENSE LEVEL IN TAX CASES 5-4
5.03[1] The Base Offense Level 5-5
5.03[1][a] Section 7201 5-7
5.03[1][b] Section 7203 5-9
5.03[1][c] Section 7206(1) 5-9
5.03[1][d] Section 7206(2) 5-10
5.03[1][e] Section 7212(a) 5-11
5.03[1][f] Section 371 5-13
5.03[2] Specific Offense Characteristics 5-14
5.03[2][a] Illegal Source Income 5-14
5.03[2][b] Sophisticated Means 5-15
5.04 RELEVANT CONDUCT 5-16
5.05 ROLE IN THE OFFENSE 5-17
5.05[1] Leadership Role in the Offense 5-17
5.05[2] Minor Role in the Offense 5-18
5.05[3] Abuse of Position of Trust or Use of a Special Skill 5-18
5.06 GROUPING 5-20
5.07 OBSTRUCTION OF JUSTICE 5-21
5.08 ACCEPTANCE OF RESPONSIBILITY 5-23
5.09 DEPARTURES 5-25
5.09[1] Departures for Aggravating or Mitigating Circumstances 5-25
5.09[2] Departure Based on Substantial Assistance to Authorities 5-26
5.10 TAX DIVISION POLICY 5-28
5.11 PLEA AGREEMENTS 5-28
5.11[1] Plea Agreements and Major Count Policy for Offenses Committed Before November 1, 1987 5-28
5.11[2] Plea Agreements and Major Count Policy for Offenses Committed After November 1, 1987 5-29
5.11[3] Nolo Contendere Pleas 5-31
5.11[4] "Alford" Pleas 5-31
5.11[5] Pleas by Corporations 5-32
5.12 TRANSFER FROM DISTRICT FOR PLEA AND SENTENCE 5-32
5.13 SENTENCING 5-32
5.13[1] Departures from the Guidelines 5-32
5.13[2] Costs of Prosecution 5-33
5.13[3] Appeal of Sentences 5-33
5.14 RESOLUTION OF CIVIL LIABILITY DURING THE CRIMINAL CASE 5-35
5.14[1] As Part of a Plea Agreement 5-35
5.14[2] Payment of Taxes as Acceptance of Responsibility 5-36
5.15 THE 1993 SENTENCING GUIDELINE AMENDMENTS 5-37
5.15[1] The Amendment of the Sentencing Table 5-38
5.15[2] Amendment Regarding Tax Loss 5-38
5.15[3] Other Amendments to the Tax Guidelines 5-40
5.15[3][a] Tax Loss For Individual and Corporate Liabilities 5-40
5.15[3][b] Tax Protestors 5-40
5.15[3][c] Income from Criminal Activity 5-40
6.01 GENERALLY 6-1
6.01[1] Constitutional and Statutory Provisions 6-1
6.01[2] Policy Considerations 6-2
6.02 PROOF OF VENUE 6-2
6.02[1] Government's Burden 6-2
6.02[2] Waiver of Improper Venue 6-3
6.03 VENUE IN TAX PROSECUTIONS 6-3
6.03[1] 26 U.S.C. § 7201: Tax Evasion 6-3
6.03[2] 26 U.S.C. § 7203: Failure to File 6-4
6.03[3] 26 U.S.C. § 7206(1): File False Tax Return 6-4
6.03[4] 26 U.S.C. § 7206(2): Aid in Preparation of False Return 6-5
6.04 REMOVAL TO DISTRICT OF RESIDENCE 6-6
6.04[1] Section 3237(b) 6-6
6.04[2] Rule 21(b) 6-7
7.01 GENERALLY 7-1
7.01[1] Statutory Provisions 7-1
7.01[2] Limitations Periods for Common Tax Offenses 7-3
7.02 TRIGGERING OF STATUTE OF LIMITATIONS 7-5
7.02[1] Filing a False Tax Return 7-5
7.02[1][a] General Rule 7-5
7.02[1][b] Definition of Timely Filed 7-6
7.02[2] Failing to File a Tax Return 7-6
7.02[3] Tax Evasion 7-7
7.02[4] Conspiracy 7-8
7.03 TOLLING PROVISION: FUGITIVE OR OUTSIDE U.S. 7-10
7.04 COMPLAINT TO EXTEND STATUTE OF LIMITATIONS 7-11
7.05 SUSPENSION OF STATUTE: SUMMONS ENFORCEMENT 7-12
8.01 STATUTORY LANGUAGE: 26 U.S.C. § 7201 8-1
8.02 GENERALLY 8-1
8.03 ELEMENTS OF EVASION 8-4
8.04 ATTEMPT TO EVADE OR DEFEAT 8-4
8.04[1] Attempt To Evade Assessment 8-5
8.04[2] Attempt To Evade Payment 8-8
8.05 ADDITIONAL TAX DUE AND OWING 8-9
8.05[1] Generally 8-9
8.05[2] Each Year -- Separate Offense 8-10
8.05[3] Substantial Tax Deficiency 8-11
8.05[4] Method of Accounting 8-13
8.05[5] Loss Carryback -- Not a Defense 8-14
8.05[6] Methods of Proof 8-14
8.05[7] Income Examples 8-15
8.06 WILLFULNESS 8-17
8.06[1] Definition 8-17
8.06[2] Proof of Willfulness 8-20
8.06[3] Examples: Proof of Willfulness 8-23
8.06[4] Willful Blindness 8-27
8.07 VENUE 8-28
8.08 STATUTE OF LIMITATIONS 8-29
8.09 LESSER INCLUDED OFFENSES 8-31
9.01 STATUTORY LANGUAGE: 26 U.S.C. § 7202 9-1
9.02 GENERALLY 9-1
9.03 ELEMENTS 9-2
9.03[1] Motor Fuel Excise Tax Prosecutions 9-5
9.04 VENUE 9-5
9.05 STATUTE OF LIMITATIONS 9-6
10.01 STATUTORY LANGUAGE: 26 U.S.C. § 7203 10-1
10.02 GENERALLY 10-1
10.03 PERSON LIABLE 10-2
10.04 FAILURE TO FILE 10-3
10.04[1] Elements 10-3
10.04[2] Required by Law to File 10-3
10.04[3] Return Not Filed at Time Required by Law 10-6
10.04[3][a] What is a Return 10-6
10.04[3][b] Return Not Filed at Time Required by Law 10-9
10.04[4] Proof of Failure to File 10-12
10.04[5] Willfulness 10-13
10.04[5][a] Proof of Willfulness 10-15
10.04[5][b] Willful Blindness 10-16
10.04[6] Tax Deficiency Not Necessary 10-18
10.04[7] Venue - Failure to File 10-18
10.04[8] Statute of Limitations 10-20
10.05 FAILURE TO PAY 10-21
10.05[1] Elements 10-21
10.05[2] Required by Law to Pay 10-21
10.05[3] Failure to Pay 10-22
10.05[4] Willful Failure to Pay 10-22
10.05[5] Venue 10-23
10.05[6] Statute of Limitations 10-24
10.06 SENTENCING 10-24
10.07 DEFENSES 10-24
10.07[1] Intent to Pay Taxes in Future 10-24
10.07[2] Absence of a Tax Deficiency 10-24
10.07[3] Delinquent Filing 10-25
10.07[4] Civil Remedy Not Relevant 10-25
10.07[5] Inability to Pay 10-25
10.07[6] IRS Required to Prepare Returns 10-26
10.07[7] Marital and Financial Difficulties 10-27
10.07[8] Fear of Filing 10-27
10.07[9] Claim That Returns Were Mailed 10-27
10.07[10] Complicated Records 10-27
10.07[11] Paperwork Reduction Act 10-28
10.07[12] Other Defenses 10-28
10.08 LESSER INCLUDED OFFENSE/RELATIONSHIP TO TAX EVASION 10-28
11.00 FRAUDULENT WITHHOLDING EXEMPTION CERTIFICATE OR FAILURE TO SUPPLY INFORMATION
11.01 STATUTORY LANGUAGE: 26 U.S.C. § 7205(a) 11-1
11.02 GENERALLY 11-1
11.03 ELEMENTS OF SECTION 7205(a) 11-3
11.04 DUTY TO COMPLETE AND FILE FORM W-4 11-3
11.05 FALSE OR FRAUDULENT INFORMATION 11-4
11.06 WILLFULNESS 11-6
11.06[1] Generally 11-6
11.06[2] Examples: Proof of Willfulness 11-7
11.07 VENUE 11-8
11.08 STATUTE OF LIMITATIONS 11-8
12.01 STATUTORY LANGUAGE: 26 U.S.C. § 7206(1) 12-1
12.02 GENERALLY 12-1
12.03 ELEMENTS 12-2
12.04 RETURN, STATEMENT, OR DOCUMENT 12-3
12.05 "MAKES" ANY RETURN, STATEMENT, OR DOCUMENT 12-4
12.06 "SUBSCRIBES" ANY RETURN, STATEMENT, OR DOCUMENT 12-5
12.06[1] Generally 12-5
12.06[2] Proof of Signature 12-6
12.07 MADE UNDER PENALTIES OF PERJURY 12-7
12.08 FALSE MATERIAL MATTER 12-8
12.08[1] Generally 12-8
12.08[2] Proof of One Material Item Enough 12-9
12.08[3] Tests of Materiality 12-10
12.08[4] Examples: Material Matter 12-11
12.08[5] Tax Deficiency Not Required 12-12
12.08[6] Examples: No Tax Deficiency 12-14
12.08[6][a] Failure to Report a Business 12-14
12.08[6][b] Failure to Report Gross Receipts 12-14
12.08[6][c] Include Net Business Income, Not Gross Income 12-14
12.08[6][d] Report False Source But Correct Figures 12-15
12.08[6][e] Gambling Losses Deducted as Business Expenses 12-15
12.08[6][f] Failure to Report Income from Illegal Business 12-15
12.08[6][g] Foreign Bank Account Questions on Tax Forms 12-16
12.09 WILLFULNESS -- DOES NOT BELIEVE TO BE TRUE AND CORRECT 12-16
12.10 LESSER INCLUDED OFFENSE CONSIDERATIONS 12-21
12.11 VENUE 12-23
12.12 STATUTE OF LIMITATIONS 12-24
13.01 STATUTORY LANGUAGE: 26 U.S.C. § 7206(2) 13-1
13.02 GENERALLY 13-1
13.03 ELEMENTS OF SECTION 7206(2) OFFENSE 13-2
13.04 AIDING AND ASSISTING 13-2
13.04[1] Persons Liable 13-2
13.04[2] Signing of Document Not Required 13-5
13.04[3] Knowledge of Taxpayer 13-6
13.04[4] Filing of Documents 13-7
13.05 FALSE MATERIAL MATTER 13-8
13.05[1] Generally 13-8
13.05[2] Tax Deficiency Not Necessary 13-9
13.05[3] Examples: "Material Matter" 13-10
13.06 WILLFULNESS 13-10
13.07 CASE EXAMPLES 13-13
13.07[1] Return Preparers 13-13
13.07[2] Sham Circular Financing Transactions 13-13
13.07[3] Inflated Values 13-13
13.07[4] Political Contributions Deducted as Business Expenses 13-14
13.07[5] Winning Racetrack Tickets -- Not Cashed by True Owner 13-14
13.07[6] Payoffs to Union Officials Designated as Commissions and Repairs 13-15
13.08 VENUE 13-15
13.09 STATUTE OF LIMITATIONS 13-16
14.01 STATUTORY LANGUAGE: 26 U.S.C. § 7206(4) 14-1
14.02 GENERALLY 14-1
14.03 ELEMENTS OF OFFENSE 14-2
14.04 REMOVES, DEPOSITS, OR CONCEALS 14-2
14.05 TAX IMPOSED OR LEVY AUTHORIZED 14-3
14.06 WILLFULNESS 14-4
14.07 VENUE 14-4
14.08 STATUTE OF LIMITATIONS 14-5
15.01 STATUTORY LANGUAGE: 26 U.S.C. § 7206(5) 15-1
15.02 GENERALLY 15-1
15.03 SCOPE OF SECTION 7206(5) 15-2
15.04 WILLFULNESS 15-2
15.05 VENUE 15-3
15.06 STATUTE OF LIMITATIONS 15-3
16.01 STATUTORY LANGUAGE: 26 U.S.C. § 7207 16-1
16.02 POLICY LIMITING THE USE OF SECTION 7207 16-1
16.03 ELEMENTS 16-5
16.04 RETURN, STATEMENT, OR OTHER DOCUMENT 16-5
16.05 FALSE OR FRAUDULENT MATERIAL MATTER 16-6
16.06 WILLFULNESS 16-6
16.07 LESSER-INCLUDED OFFENSE CONSIDERATIONS 16-6
16.08 VENUE 16-7
16.09 STATUTE OF LIMITATIONS 16-7
17.01 STATUTORY LANGUAGE: 26 U.S.C. § 7212(a)"OMNIBUS CLAUSE" 17-1
17.02 GENERALLY 17-1
17.03 ELEMENTS OF THE OMNIBUS CLAUSE 17-2
17.04 IN ANY WAY CORRUPTLY 17-3
17.05 ENDEAVORING 17-6
17.06 TO OBSTRUCT OR IMPEDE THE DUE ADMINISTRATION OF THE INTERNAL REVENUE LAWS 17-8
17.07 VENUE 17-9
17.08 STATUTE OF LIMITATIONS 17-9
17.09 SENTENCING GUIDELINES 17-9
18.01 STATUTORY LANGUAGE: 26 U.S.C. § 7215 & 7512 18-1
18.02 GENERALLY 18-2
18.03 ELEMENTS OF "TRUST FUND" CASES 18-3
18.04 PERSON REQUIRED TO COLLECT, ACCOUNT FOR, AND PAY OVER 18-4
18.04[1] Person Required -- "Employer" 18-4
18.04[2] Employees 18-6
18.05 REQUIREMENTS OF SECTION 7512(b) 18-6
18.05[1] Notice of Failure to Collect, Account For, and Pay Over 18-6
18.05[2] Bank Account For Trust Deposits 18-7
18.05[3] Prior Failures to Pay 18-8
18.05[4] Dates of Payroll Checks 18-8
18.05[5] Expert Testimony Excluded 18-9
18.06 CIRCUMSTANCES BEYOND CONTROL 18-9
18.07 INTENT 18-9
18.08 DEFENSES 18-10
18.08[1] Constitutional Contentions 18-10
18.08[2] Selective Prosecution 18-10
18.08[3] Prior Excess Deposits 18-11
18.08[4] Late Payment of Taxes 18-11
18.08[5] Lack of Funds 18-11
18.08[6] Embezzlement 18-11
18.09 POLICY CONSIDERATIONS 18-12
18.10 VENUE 18-13
18.11 STATUTE OF LIMITATIONS 18-13
19.00 [RESERVED]
20.00 [RESERVED]
____________
VOLUME 2
____________21.01 STATUTORY LANGUAGE: 18 U.S.C. § 2 21-1
21.02 GENERALLY 21-1
21.03 ELEMENTS 21-2
21.03[1] Need Underlying Offense 21-3
21.03[2] Association Defined 21-3
21.03[3] Participation and Success of Venture 21-4
21.04 PLEADING REQUIREMENTS 21-5
21.05 APPLICATION IN TAX CASES 21-6
21.05[1] Aiding in Preparation/Filing of False Return: 26 U.S.C. § 7206(2) 21-6
21.05[2] Filing False Claim for Refund: 18 U.S.C. § 287 21-6
21.06 VENUE 21-7
21.07 STATUTE OF LIMITATIONS 21-7
22.01 STATUTORY LANGUAGE: 18 U.S.C. § 287, 286 22-1
22.02 GENERALLY 22-1
22.03 18 U.S.C. § 287 -- ELEMENTS 22-2
22.03[1] Claim Against the United States 22-2
22.03[2] False, Fictitious, or Fraudulent Claim 22-4
22.03[2][a] False, Fictitious or Fraudulent 22-4
22.03[2][b] Materiality 22-5
22.03[3] Knowledge -- Intent -- Willfulness 22-6
22.04 18 U.S.C. § 286 -- ELEMENTS 22-7
22.05 VENUE 22-8
22.06 STATUTE OF LIMITATIONS 22-8
22.07 THE MECHANICS OF A FALSE RETURN 22-9
22.08 AUTHORIZATION OF INVESTIGATIONS AND PROSECUTIONS 22-11
22.08[1] Authorization of Grand Jury Investigations -- Tax Division Directive No. 96 22-11
22.08[2] Authorization of Prosecution in False Claims Cases 22-12
22.09 SENTENCING GUIDELINES CONSIDERATIONS 22-13
23.00 CONSPIRACY TO COMMIT OFFENSE OR TO DEFRAUD THE UNITED STATES
23.01 STATUTORY LANGUAGE: 18 U.S.C. § 371 23-1
23.02 GENERALLY 23-1
23.03 ELEMENTS 23-2
23.04 AGREEMENT 23-3
23.04[1] Proof of Agreement 23-3
23.04[2] Two or More Persons 23-4
23.04[2][a] Limitation on Naming Unindicted Coconspirators 23-5
23.04[2][b] Conspiring With Government Agents 23-5
23.04[2][c] Corporations as Conspirators 23-6
23.04[3] Scope of the Agreement -- Single or Multiple Objects 23-6
23.05 MEMBERSHIP 23-7
23.05[1] Intent Requirement 23-7
23.05[2] Proof of Membership 23-8
23.05[3] Pinkerton Liability 23-9
23.06 OVERT ACT 23-10
23.06[1] Definition 23-10
23.06[2] Acts of Concealment 23-11
23.07 CONSPIRACY TO DEFRAUD THE UNITED STATES 23-12
23.07[1] Generally 23-12
23.07[1][a] Sec. 371: Two Forms of Conspiracy 23-12
23.07[1][b] Scope of Defraud Clause 23-13
23.07[1][c] Pleading Requirements 23-14
23.07[2] Klein Conspiracy 23-15
23.07[2][a] Generally 23-15
23.07[2][b] Examples: Klein fact patterns 23-16
23.07[2][c] Extra Element in Ninth Circuit: Caldwell 23-24
23.07[3] Overlapping Conspiracies 23-24
23.07[4] Scope of Intent 23-28
23.07[4][a] Generally 23-28
23.07[4][b] Klein Conspiracy Coupled With a Narcotics or Money Laundering Prosecution 23-29
23.08 STATUTE OF LIMITATIONS 23-33
23.08[1] Generally 23-33
23.08[2] Beginning of Limitations Period 23-34
23.08[3] Withdrawal Defense 23-34
23.09 VENUE 23-36
24.01 STATUTORY LANGUAGE: 18 U.S.C. § 1001 24-1
24.02 GENERALLY 24-1
24.03 ELEMENTS 24-3
24.04 FALSE STATEMENTS OR REPRESENTATIONS 24-4
24.05 MATTER WITHIN JURISDICTION OF A FEDERAL AGENCY 24-6
24.06 MATERIALITY 24-9
24.07 WILLFULNESS 24-12
24.08 DEFENSES 24-13
24.08[1] Exculpatory No Doctrine 24-13
24.08[2] Wrong Statute Charged 24-15
24.08[3] Variance 24-16
24.09 VENUE 24-16
24.10 STATUTE OF LIMITATIONS 24-17
25.01 26 U.S.C. § 6050I -- RETURNS RELATING TO CASH RECEIVED IN TRADE OR BUSINESS (FORMS 8300) 25-1
25.01[1] Statutory Language: 26 U.S.C. § 6050I 25-1
25.01[2] Treasury Regulations: 26 C.F.R. 25-4
25.01[3] Attorney Fee Reporting 25-6
25.01[4] Criminal Prosecution: Failing to File Correct Forms; Structuring to Evade Reporting 25-10
25.01[4][a] Duty To File Correct Forms 8300 -- WILLFULNESS 25-11
25.01[4][b] Title 18 25-13
25.01[5] Sentencing 25-13
25.01[6] Venue 25-14
25.01[7] Statute of Limitations 25-14
25.01[8] Policy and Procedure 25-15
25.01[8][a] Tax Return Disclosure 25-16
25.02 18 U.S.C. § 1956(a)(1)(A)(ii) -- LAUNDERING OF MONETARY INSTRUMENTS 25-16
25.02[1] Statutory Language: 18 U.S.C. § 1956(a)(1)(A)(ii) 25-16
25.02[2] Generally 25-17
25.02[3] Elements 25-17
25.02[4] Conduct Financial Transaction 25-18
25.02[5] Knowledge 25-19
25.02[6] Proceeds of Specified Unlawful Activity 25-21
25.02[7] Intent to Evade Tax or Commit Tax Fraud 25-22
25.02[8] Sentencing 25-25
25.02[9] Venue 25-25
25.02[10] Statute of Limitations 25-25
25.02[11] Policy and Procedure 25-25
30.01 GENERALLY 30-1
30.02 UNREPORTED INCOME -- OVERCOMING AMOUNTS REPORTED ON RETURN 30-3
30.03 UNREPORTED INCOME -- IDENTIFIED INCOME ITEMS NOT ON RETURN 30-4
30.04 FAILURE TO REPORT BUSINESS OR SOURCE OF INCOME 30-5
30.05 OVERSTATED DEDUCTIONS OR EXPENSES 30-9
30.05[1] Generally 30-9
30.05[2] Individuals and Businesses 30-10
30.05[3] Return Preparers 30-11
30.06 DEFENDANT'S ADMISSIONS 30-12
30.06[1] Generally 30-12
30.06[2] Dummy Returns 30-12
30.06[3] Delinquent Returns 30-13
30.06[4] Timely Filed Returns 30-13
30.07 NO REASONABLE LEADS DOCTRINE 30-14
30.08 PROPER CHARACTERIZATION OF METHOD OF PROOF 30-15
30.09 CRIMINAL COMPUTATIONS 30-16
30.09[1] Method Of Accounting 30-16
30.09[2] Proper Income Allocation 30-17
30.09[3] Treatment of Known Deductions 30-17
30.10 USING MULTIPLE METHODS OF PROOF 30-18
31.01 GENERALLY 31-1
31.02 DESCRIPTION OF NET WORTH METHOD 31-2
31.03 USE OF NET WORTH METHOD 31-3
31.03[1] Inadequate Books and Records 31-3
31.03[2] Adequate Books and Records 31-4
31.03[3] Use With Other Methods 31-5
31.04 PROOF OF NET WORTH -- GENERALLY 31-5
31.05 OPENING NET WORTH 31-6
31.05[1] Proof -- "Reasonable Certainty" 31-6
31.05[2] Thorough Investigation a Necessity 31-8
31.05[3] Evidence Establishing Opening Net Worth 31-9
31.05[4] Opening Net Worth Not Established 31-12
31.06 CASH ON HAND 31-14
31.06[1] Definition -- Need to Establish 31-14
31.06[2] Jury Question -- Burden of Proof 31-16
31.06[3] Amount of Cash on Hand 31-17
31.07 EVIDENCE OF CASH ON HAND 31-19
31.07[1] Evidence of Financial Deprivation 31-19
31.07[2] Admissions of Defendant 31-20
31.07[2][a] Pre-Offense Admissions 31-20
31.07[2][b] Post-Offense Admissions 31-20
31.07[3] Tax Returns As Admissions 31-22
31.07[4] Statements Given to Financial Establishments 31-23
31.07[5] Defendant's Books and Records 31-24
31.07[6] Statements of Accountants and Attorneys 31-25
31.07[7] Accountant's Workpapers 31-26
31.07[8] Source and Application of Funds Analysis 31-26
31.08 NET WORTH ASSETS 31-27
31.08[1] Reflected at Cost -- Generally 31-27
31.08[2] Across the Board Assets 31-28
31.08[3] Bank Accounts and Nominee Accounts 31-29
31.08[4] Assets and Liabilities of Husband and Wife or Children 31-30
31.08[5] Real Property 31-31
31.08[6] Partnership Interest 31-32
31.08[7] Errors in Net Worth Computation 31-32
31.09 LIABILITIES 31-33
31.10 NONDEDUCTIBLE EXPENDITURES 31-34
31.10[1] Added to Net Worth Increase 31-34
31.10[2] Burden on Government 31-34
31.10[3] Nondeductible Expenditures -- Examples 31-35
31.11 REDUCTIONS IN NET WORTH 31-37
31.12 ATTRIBUTING NET WORTH INCREASES TO TAXABLE INCOME 31-38
31.12[1] Generally 31-38
31.12[2] Proof of Likely Source of Taxable Income 31-39
31.12[3] Illegal Sources of Income 31-41
31.12[4] Negating Nontaxable Sources of Income 31-43
31.13 REASONABLE LEADS DOCTRINE 31-45
31.13[1] Duty to Investigate Reasonable Leads 31-45
31.13[2] Leads Must Be Reasonable and Timely 31-48
31.14 NET WORTH SCHEDULES 31-49
31.15 JURY INSTRUCTIONS 31-50
31.16 SAMPLE NET WORTH SCHEDULE 31-51
32.01 GENERALLY 32-1
32.02 REQUIREMENTS FOR ESTABLISHING AN EXPENDITURES CASE 32-2
32.03 CONCEPTS APPLICABLE TO EXPENDITURES CASES 32-3
32.03[1] Opening Net Worth 32-3
32.03[2] Cash on Hand 32-5
32.03[3] Cash Hoard Defense 32-5
32.03[4] Duplication of Expenditures 32-6
32.03[5] Likely Source of Income 32-6
32.03[6] Summary Exhibits 32-7
32.04 JURY INSTRUCTIONS 32-7
33.01 GENERALLY 33-1
33.01[1] Consistently Approved Method of Proof 33-2
33.01[2] Used Alone or With Other Methods 33-3
33.01[3] Cross Reference 33-4
33.02 PRELIMINARY FOUNDATION FOR USE 33-4
33.03 BUSINESS OR INCOME-PRODUCING ACTIVITY 33-6
33.04 ANALYSIS OF DEPOSITS 33-7
33.04[1] Generally 33-7
33.04[2] Currency Deposits 33-8
33.04[3] Missing or Incomplete Bank Records 33-10
33.05 ELIMINATION OF NON-INCOME ITEMS 33-12
33.05[1] Generally 33-12
33.05[2] Proof of Non-Income Items 33-12
33.05[3] Good Faith Errors 33-13
33.06 UNIDENTIFIED DEPOSITS 33-14
33.07 BANK DEPOSITS PLUS UNDEPOSITED CURRENCY EXPENDITURES 33-17
33.07[1] Generally 33-17
33.07[2] Amount of Cash Expenditures 33-18
33.08 CASH ON HAND 33-20
33.08[1] Generally 33-20
33.08[2] Proof Of Cash On Hand 33-22
33.09 REASONABLE LEADS 33-22
33.10 USE OF SUMMARY CHARTS AND SCHEDULES 33-24
33.11 JURY INSTRUCTIONS 33-25
33.12 SAMPLE BANK DEPOSITS COMPUTATION 33-25
40.01 GENERALLY 40-1
40.02 FAILURE TO FILE -- 26 U.S.C. § 7203 40-1
40.02[1] Generally 40-1
40.02[2] What Constitutes a Return 40-1
40.02[3] Return or Not -- Matter of Law 40-3
40.03 FRAUDULENT EMPLOYEE'S WITHHOLDING ALLOWANCE CERTIFICATE -- 26 U.S.C. § 7205 40-5
40.03[1] Generally 40-5
40.03[2] Employee's Withholding Allowance Certificate, Form W-4 40-6
40.04 SPIES EVASION -- 26 U.S.C. § 7201 40-7
40.04[1] Spies Evasion Via Filing False Form W-4 40-7
40.04[2] Section 7201 Indictments Not Duplicitous 40-9
40.04[3] Statute of Limitations Considerations 40-9
40.05 SUBSCRIBING TO A FALSE RETURN -- 26 U.S.C. § 7206(1) 40-10
40.06 FALSE STATEMENT OR DOCUMENT -- 18 U.S.C. § 1001 40-10
40.07 AIDING AND ASSISTING PREPARATION OF FALSE RETURNS -- 26 U.S.C. § 7206(2) 40-10
40.08 OMNIBUS CLAUSE PROSECUTION: SECTION 7212(a) 40-11
40.09 CHURCH SCHEMES 40-12
40.09[1] Generally 40-12
40.09[2] The Vow of Poverty Scheme 40-13
40.09[3] The Charitable Contribution Scheme 40-14
40.09[4] The First Amendment -- Freedom of Religion 40-15
40.10 FALSE FORM 1099 SCHEMES 40-18
40.11 WILLFULNESS 40-19
40.11[1] Generally 40-19
40.11[2] Good Faith Belief 40-21
40.12 SELECTIVE PROSECUTION AND FREEDOM OF SPEECH 40-25
40.12[1] Generally 40-25
40.12[2] Selective Prosecution Defense 40-25
40.12[3] Freedom of Speech 40-28
40.13 FIFTH AMENDMENT RIGHT AGAINST SELF-INCRIMINATION 40-30
40.14 MISCELLANEOUS FRIVOLOUS DEFENSES 40-32
40.14[1] Wages Are Not Income 40-32
40.14[2] District Court Jurisdiction of Title 26 Offenses 40-33
40.14[3] Voluntariness of Filing Income Tax Returns 40-33
40.14[4] Duty of IRS to Prepare Returns 40-34
40.14[5] Fourth Amendment Right Against Unreasonable Searches and Seizures 40-35
40.14[6] Unconstitutional Vagueness 40-35
40.14[7] Ratification of Sixteenth Amendment 40-36
40.14[8] Violation of the Privacy Act 40-36
40.14[9] Defendant Not A "Person" or "Citizen" 40-36
40.14[10] Federal Reserve Notes are Not Legal Tender 40-37
40.14[11] Tax Protest Against Government Spending 40-37
40.14[12] Reliance on Advice of Counsel 40-38
40.14[13] Rule 404(b) Evidence: Proof of Willfulness 40-39
40.14[14] Probable Cause Hearings 40-40
40.14[15] Costs of Prosecution 40-40
40.14[16] Form W-2: Outdated Federal Register Regulation 40-41
40.14[17] Civil Assessments 40-41
40.14[18] Conditions of Probation 40-42
40.14[19] 26 U.S.C. § 6103(h)(5) Juror Audit Information 40-42
40.14[20] Paperwork Reduction Act Defense 40-46
40.14[21] Admissibility of IRS Computer Records 40-47
40.14[22] Lack of Publication in the Federal Register 40-47
40.14[23] IRS Agent's Testimony and Sequestration 40-48
40.14[24] Attorney Sanctions 40-48
40.14[25] Discovery of IRS Master Files 40-49
40.14[26] IRS Agents' Authority 40-49
40.14[27] Indictment: Sufficient Notice of Illegality 40-49
40.15 MISCELLANEOUS PROCEDURAL ISSUES 40-50
40.15[1] Right to Counsel, Right to Counsel of Choice, Right to Representation by Lay Person or Unlicensed Counsel, Right to Defend Pro Se 40-50
40.15[2] Jury Nullification 40-54
41.00 OBTAINING FOREIGN EVIDENCE AND OTHER TYPES OF ASSISTANCE FOR CRIMINAL TAX CASES
41.01 INTRODUCTION 41-1
41.02 OBTAINING FOREIGN EVIDENCE OR OTHER TYPES OF
ASSISTANCE UNDER MUTUAL LEGAL ASSISTANCE TREATIES 41-1
41.02[1] Background 41-1
41.02[2] MLATs Currently in Effect 41-2
41.02[3] The Extent of Tax Coverage in MLATs 41-2
41.02[4] Designation of a Central Authority to Administer the MLAT for Each Treaty Partner 41-3
41.02[5] Public Law Enforcement Purpose of MLATs 41-3
41.02[6] Matters for Which Assistance Is Available under MLATs 41-3
41.02[7] Types of Assistance Available under MLATs 41-4
41.02[8] Procedures for Making Requests for Assistance 41-5
41.02[9] Contents of a Request 41-5
41.02[10] Limitations on Use of Evidence or Information Obtained 41-6
41.02[11] Obligation to Return the Items Provided 41-6
41.03 MUTUAL LEGAL ASSISTANCE UNDER FOREIGN STATUTES WHERE
NO FORMAL TREATY RELATIONSHIP EXISTS 41-7
41.04 OBTAINING FOREIGN EVIDENCE UNDER TAX INFORMATION EXCHANGE AGREEMENTS AND TAX TREATIES 41-7
41.04[1] Background 41-7
41.04[2] Tax Information Exchange Agreements (TIEAs) 41-8
41.04[3] TIEAs Currently in Effect 41-8
41.04[4] Information Exchange under Tax Treaties 41-8
41.04[5] Tax Treaties Currently in Effect 41-9
41.04[6] Scope of TIEAs and Income Tax Treaties 41-9
41.04[7] Designation of a Competent Authority to Administer TIEAs and Tax Treaties for Each Treaty Partner 41-9
41.04[8] Procedures for Making Requests For Information 41-10
41.04[9] Contents of a Request 41-10
41.04[10] Confidentiality of Information Obtained 41-11
41.04[11] Possible Problems with Exchanging Information under TIEAs and Income Tax Treaties 41-12
41.05 USING LETTERS ROGATORY AND OTHER JUDICIAL PROCEDURES TO OBTAIN EVIDENCE IN CRIMINAL TAX CASES 41-12
41.05[1] Background 41-12
41.05[2] Deposition by Stipulation, Notice, or Commission 41-13
41.05[3] Depositions by Letters Rogatory 41-14
41.05[4] Procedures for Obtaining Assistance by Letters Rogatory 41-15
41.05[5] Problems with the Letters Rogatory Process Generally 41-16
41.05[6] Specific Problems with the Letters Rogatory Process When Used in Criminal Tax Cases 41-16
41.06 USING COMPULSORY MEASURES TO OBTAIN FOREIGN EVIDENCE 41-18
41.06[1] Background 41-18
41.06[2] The Use of Subpoenas or Summonses to Obtain Foreign Evidence Directly 41-18
41.06[3] The Use of Subpoenas to Obtain Testimony of a Nonresident Temporarily in the United States 41-20
41.06[4] The Use of Compelled Directives to Obtain Disclosure of Financial Matters Covered by Foreign Secrecy Laws 41-21
41.06[5] The Use of Subpoenas Issued to United States Citizens or Residents Abroad 41-22
41.06[6] Jurisdictional Conflicts Arising from the Use of Certain Unilateral Measures 41-22
41.07 CONCLUSION 41-23
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VOLUME 3
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60.00 TRIAL OF A CRIMINAL TAX CASE 60-1
INDICTMENT AND INFORMATION FORMS I
Title Page || Table of Contents || Detailed Table of Contents || Table of Cases || Trial of a Criminal Tax Case || Model Jury Instructions || Indictment & Information Forms ||