TAX VIOLATIONS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1115
II. CRIMINAL INVESTIGATIONS UNDER I.R.C. §§ 7201, 7202, 7203, 7206,
AND 7212(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1115
A. Legal Landscape of IRS Investigations . . . . . . . . . . . . . . . . . . 1115
1. Responsibility for Investigation and Prosecution . . . . . . . 1115
2. Constitutional Considerations . . . . . . . . . . . . . . . . . . . . . 1117
a. Notice and Due Process Requirements . . . . . . . . . . . 1117
b. Substantive Rights and the Internal Revenue Manual 1117
c. Disclosure of Documents. . . . . . . . . . . . . . . . . . . . . 1118
3. Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1120
4. Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . 1120
B. I.R.C. § 7201—Tax Evasion . . . . . . . . . . . . . . . . . . . . . . . . . 1121
1. Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1122
a. Existence of a Tax Deficiency . . . . . . . . . . . . . . . . . 1122
b. Affirmative Act Constituting Evasion . . . . . . . . . . . . 1125
c. Willfulness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1126
2. Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1127
a. Lack of Deficiency . . . . . . . . . . . . . . . . . . . . . . . . . 1127
b. Lack of Willfulness. . . . . . . . . . . . . . . . . . . . . . . . . 1128
c. Reliance on Expert Advice . . . . . . . . . . . . . . . . . . . 1129
d. Selective Prosecution and Other Constitutional
Defenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1130
3. Relation to Other Tax Crimes . . . . . . . . . . . . . . . . . . . . . 1131
C. I.R.C. § 7202—Failure to Collect Tax . . . . . . . . . . . . . . . . . . 1131
1. Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1131
a. Duty to Collect or to Account for and Pay Over Tax. . . 1131
b. Failure to Collect, Truthfully Account For, or Pay
Over Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1134
c. Willfulness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1134
2. Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1134
D. I.R.C. § 7203—Failure to File Taxes . . . . . . . . . . . . . . . . . . . 1135
1. Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1135
a. Requirement to File a Return . . . . . . . . . . . . . . . . . . 1135
b. Failure to File a Return . . . . . . . . . . . . . . . . . . . . . . 1136
c. Willfulness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1136
2. Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1137
E. I.R.C. § 7206— Tax Fraud & False Statements and Aiding or
Assisting Tax Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1138
1. I.R.C. § 7206(1)—Tax Perjury . . . . . . . . . . . . . . . . . . . . 1138
1113
a. Making and Subscribing a False Return or
Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1139
b. Signed under Penalty of Perjury . . . . . . . . . . . . . . . . 1139
c. Material Falsity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1140
d. Willfulness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1142
e. Defenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1142
2. I.R.C. § 7206(2)—Aiding and Assisting Tax Fraud . . . . . 1143
a. Aiding or Assisting . . . . . . . . . . . . . . . . . . . . . . . . . 1143
b. Material Falsity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1144
c. Willfulness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1144
d. Defenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1144
F. I.R.C. § 7212(a)—Interference with the Internal Revenue Laws. . . 1145
1. Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1145
a. Corruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1145
b. Endeavor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1146
c. Nexus Between the Defendant’s Conduct and an
Administrative Proceeding. . . . . . . . . . . . . . . . . . . . 1146
d. The Stage of Proceeding . . . . . . . . . . . . . . . . . . . . . 1146
2. Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1147
G. Sanctions Under the U.S. Sentencing Guidelines . . . . . . . . . . 1147
1. Violations of I.R.C. § 7201 . . . . . . . . . . . . . . . . . . . . . . . 1147
2. Violations of I.R.C. § 7202 . . . . . . . . . . . . . . . . . . . . . . . 1148
3. Violations of I.R.C. § 7203 . . . . . . . . . . . . . . . . . . . . . . . 1148
4. Violations of I.R.C. § 7206 . . . . . . . . . . . . . . . . . . . . . . . 1149
5. Violations of I.R.C. § 7212(a) . . . . . . . . . . . . . . . . . . . . . 1149
III. CRIMINAL CONSPIRACY INVESTIGATIONS UNDER 18 U.S.C. § 371. . . . . . 1150
A. Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1150
B. Defenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1152
C. Statute of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1153
IV. OTHER RELATED CRIMINAL STATUTES . . . . . . . . . . . . . . . . . . . . . . 1153
A. Related Title 18 Violations . . . . . . . . . . . . . . . . . . . . . . . . . . 1153
1. 18 U.S.C. § 286: Conspiracy to Defraud the Government
with Respect to Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 1153
2. 18 U.S.C. § 287: False, Fictitious, or Fraudulent Claims . . 1153
B. Related Title 31 Violations: Bank Secrecy Act and Anti-Money
Laundering Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1154
1. 31 U.S.C. § 5314: Report of Foreign Bank and Financial
Accounts (FBARs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1154
2. 31 U.S.C. § 5331(a) & I.R.C. § 6050I: Cash Transaction
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1155
1114 AMERICAN CRIMINAL LAW REVIEW [Vol. 61:1113
I. INTRODUCTION
This Article outlines the elements, defenses, and sentencing consequences of
select criminal tax violations
1
of Title 26 of the United States Code, the Internal
Revenue Code (“I.R.C.”), which are prosecuted under an array of criminal tax
statutes.
2
Section II of this article examines the policies and procedures of Internal
Revenue Service (“IRS”) criminal investigations. In doing so, it addresses the ba-
sic elements of, defenses to, and sanctions for five principal tax crimes: (i) tax eva-
sion under I.R.C. § 7201; (ii) willful failure to collect tax under § 7202; (iii)
willful failure to file taxes under § 7203; (iv) tax perjury and aiding and assisting
tax fraud under § 7206; and (v) interference with the administration of internal
revenue laws under § 7212(a). Sections III and IV examine criminal statutes that
may implicate tax crimes but that are not within the I.R.C. Section III details crim-
inal investigations of conspiracy to violate the tax laws under the “defraud clause”
of the general federal conspiracy statute, 18 U.S.C. § 371. Section IV examines
various criminal statutes within Titles 18 and 31 of the United States Code that
relate to tax crimes.
II. CRIMINAL INVESTIGATIONS UNDER I.R.C. §§ 7201, 7202, 7203, 7206,
AND 7212(A)
Part A of this Section examines the legal landscape of criminal tax investiga-
tions, including: the division of responsibility for investigation and prosecution,
constitutional considerations, venue, and the statute of limitations for I.R.C. viola-
tions. Parts B through F of this Section address the elements of, and defenses to,
each of the following offenses: (i) tax evasion and attempted tax evasion; (ii) fail-
ure to collect tax; (iii) failure to file taxes; (iv) tax perjury and aiding and assisting
tax fraud; and (v) interference with the administration of internal revenue laws.
Part G explains potential punishments set forth by the United States Sentencing
Guidelines (“Guidelines”), as well as possible sentencing enhancements.
A. Legal Landscape of IRS Investigations
1. Responsibility for Investigation and Prosecution
The IRS uses two investigative bodies in carrying out its responsibility to
enforce tax laws: the Criminal Investigation Division and the Examination
Division. The IRS Criminal Investigation Division (“CI”) is the IRS’s criminal
law enforcement agency, which investigates potential criminal violations of the
1. This article focuses on the most serious and common tax crimes. The remaining I.R.C. criminal provisions
are omitted here because they are either relatively minor (such as fraud on submitted copies of Form W-4) or rare
(such as forcible rescue of seized property).
2. I.R.C. §§ 7201–7232, 7261–7262, 7268–7273, 7275 (setting forth criminal provisions of the Tax Code).
2024] TAX VIOLATIONS 1115
