Switch to ADA Accessible Website
Orlando Criminal Lawyer
call for a free
consultation

How Paying Your Tax Bill with a Bad Check Can Land You in Serious Trouble

shutterstock_301216418

It is not unusual for people to fall behind in paying their taxes. But there is a difference between an honest person who is simply unable to pay and someone who intentionally tries to avoid paying. The government can–and will–prosecute people in the latter group. Fortunately, there are ways to resolve tax disputes before it gets to a criminal trial. But again, if you try and cheat the system, you will find yourself in significantly more trouble than you expect.

Appeals Court Declines to Reverse Conviction for “Obstructing” the IRS

The United States Court of Appeals for the 11th Circuit recently addressed such a case. In United States v. Graham, the defendant owed the Internal Revenue Service (IRS) over $3.6 million. Prosecutors then alleged the defendant tried to pay that tax bill with a fraudulent promissory note. That led to criminal charges of “passing a fictitious financial instrument” and “endeavoring to obstruct the administration of the Internal Revenue Code.” This second charge is what made its way up to the 11th Circuit.

First, here is some additional background on the case. The defendant made millions running bingo games. Unfortunately, the IRS said the defendant “paid only a portion” of the income tax owed on this income. In 2009, an IRS official sent the defendant a notice of “intent to levy.” This is basically the final step the IRS takes before taking formal collection action against a taxpayer. After the defendant received this notice, he decided to open talks with the IRS.

Over the next three years or so, the defendant made partial payments. The IRS also seized and sold some of the defendant’s property. But as of 2012, the defendant still owed $3.6 million. The defendant then turned to a man who billed himself as a “credit repair” specialist. This person sold the defendant a “bill of exchange,” essentially a type of promissory note, which purported to cover the $3.6 million tax bill. The IRS subsequently determined this bill of exchange was fraudulent.

A jury found the defendant guilty of passing the fraudulent bill of exchange and obstructing the administration of the Internal Revenue Code. He received a four-year prison sentence. On appeal, the defendant argued there was insufficient evidence to support the obstruction conviction.

The 11th Circuit disagreed. As the Court explained, historically there were only two things the government needed to prove on this type of obstruction charge: First, that the defendant “knowingly tried to obstruct or impede” the IRS; and second, that he “did so corruptly.” In 2018, however, the U.S. Supreme Court added a third item to the list: Proving there was a “nexus between the defendant’s conduct and a particular administrative proceeding, such as an investigation, an audit, or other targeted administrative action.”

The main issue before the 11th Circuit in this case was whether the IRS’s collection activity against the defendant fell within this definition of “particular administrative proceeding.” The Court held that it did. Indeed, the judges said this was not even a close call. This was not simply a case where the defendant paid a tax bill with a bad check. “For years,” the Court noted, “the IRS took targeted administrative action against [the defendant] well beyond the ‘ordinary course’ of the agency’s interaction with taxpayers.”

Call Orlando Criminal Defense Lawyer Jose Baez Today

Even non-violent crimes like tax fraud can lead to serious prison time. That is why you need to take such charges seriously. If you need representation from a qualified Orlando white collar crimes attorney, contact the Baez Law Firm today to schedule a free consultation.

Source:

media.ca11.uscourts.gov/opinions/pub/files/201815299.pdf

https://www.baezlawfirm.com/the-arbitrary-unfair-nature-of-white-collar-criminal-prosecutions-in-the-us/

  • Facebook
  • Twitter
  • LinkedIn
Miami

Miami Office

1200 Brickell Avenue #1410
Miami, FL 33131
Office: 305-999-5100
Fax: 305-999-5111
Orlando

Orlando Office

23 South Osceola Avenue
Orlando, FL 32801
Office: 407-705-2626
Fax: 407-705-2625

Email Us

Fields Marked * Are required

DISCLAIMER: Completing and submitting this form or otherwise merely contacting The Baez Law Firm or any individual at the firm will not establish an attorney/client relationship. Our firm cannot represent you until we determine that there would be no conflict of interest and that we are otherwise able to accept representation of your case. Please do not send any information or documents until a formal attorney/client relationship has been established through an interview with an attorney and you have been given authorization in the form of an engagement letter with The Baez Law Firm. Any information or documents sent via this form or otherwise prior to your receipt of an engagement letter will not be treated as confidences, secrets, or protected information of any nature. Submitting information regarding your potential case will not bar The Baez Law Firm from representing or continuing to represent a person or entity whose interest are adverse to your in condition with your case.

protected by reCAPTCHA Privacy - Terms
Please review the highlighted fields. They are required.
DISCLAIMER: This website contains information about The Baez Law Firm that includes testimonial statements from persons who are familiar with the firm's services. The testimonials shown are not necessarily representative of every person's experience with us. Testimonials from every client are not provided. As no two situations or persons are identical, the facts and circumstances of your situation may differ from those for which testimonials are shown. This website also includes information about some of the past results that we have obtained for our clients. Not all results are provided, and the results shown are not necessarily representative of all results obtained by us. No two situation are exactly alike; every person's situation is unique and the outcome for each person depends on the individual facts.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.
MileMark Media - Practice Growth Solutions

© 2015 - 2021 Baez Law Firm. All rights reserved.
This law firm website and legal marketing are managed by MileMark Media.

Contact Form Tab Contact Form Tab