- 7 -
we think it clear that allowance of petitioner's claimed
deduction would frustrate a clearly defined national policy.
We hold that petitioner is not entitled to a loss deduction.
Constitutional Arguments
Petitioner argues that taxing the IRA distributions without
allowing a loss deduction for the forfeiture violates the Double
Jeopardy Clause of the Fifth Amendment3 and the Excessive Fines
Clause of the Eighth Amendment4 to the U.S. Constitution.
Petitioner cites Department of Revenue v. Kurth Ranch, 511 U.S.
767 (1994); Austin v. United States, 509 U.S. 602 (1993); and
United States v. Halper, 490 U.S. 435, 440 (1989).
Both the Double Jeopardy Clause and the Excessive Fines
Clause protect individuals against punishment. United States v.
Alt, 83 F.3d 779, 784 (6th Cir. 1996). The imposition of
liability for a Federal income tax deficiency has a remedial
intent and is not a punishment. Id.; McNichols v. Commissioner,
13 F.3d 432 (1st Cir. 1993), affg. T.C. Memo. 1993-61; Ianniello
v. Commissioner, 98 T.C. 165, 180 (1992); cf. Helvering v.
Mitchell, 303 U.S. 391, 397 (1938) (holding that the addition to
tax for fraud is remedial). Courts have considered the cases
3 U.S. Const. amend. V provides "nor shall any person be
subject for the same offence to be twice put in jeopardy of life
or limb".
4 U.S. Const. amend. VIII provides "Excessive bail shall
not be required, nor excessive fines imposed".
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011