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petitioner’s criminal case, he was incarcerated for life, and his
assets/income from espionage were forfeited.
This Court recently reaffirmed that additions to tax for
fraud are a civil remedy, not a criminal punishment, and
therefore beyond the scope of the Double Jeopardy Clause. See
Louis v. Commissioner, T.C. Memo. 1996-257, affd. per curiam 170
F.3d 1232 (9th Cir. 1999). The Supreme Court, after our holding
and before the Court of Appeals’ affirmance in Louis, considered
the nature of monetary penalties imposed on bank officers already
convicted of misapplying bank funds. See Hudson v. United
States, 522 U.S. 93 (1997). A two-step analysis was used in
Hudson to determine whether a penalty is civil or criminal. See
id. at 99. The two-step Hudson approach was not employed by our
Court in Louis in concluding that the addition to tax for fraud
does not constitute a criminal punishment. The two-step process
requires analysis of the statutory language to determine whether
Congress indicated an express or implied preference for one label
or the other, and if a civil penalty is intended, then an
evaluation of “‘whether the statutory scheme [is] so punitive
either in purpose or effect’” that it transforms the intended
10(...continued)
tax and penalties are being employed as punishment. He does not
argue that his forfeiture of the income and assets associated
with his illegal espionage activity should obviate any tax
burden.
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