Martin and Barbara Schachter - Page 6

                                        - 6 -                                         
               The Supreme Court has described civil fraud additions to tax           
          as established “for the protection of the revenue and to                    
          reimburse the Government for the heavy expense of investigation             
          and the loss resulting from the taxpayer's fraud.”  Helvering v.            
          Mitchell, 303 U.S. at 401; see also Louis v. Commissioner, 170              
          F.3d 1232, 1235 (9th Cir. 1999), affg. T.C. Memo. 1996-257;                 
          Thomas v. Commissioner, 62 F.3d 97, 100 (4th Cir. 1995), affg.              
          T.C. Memo. 1994-128; Ames v. Commissioner, 112 T.C. 304 (1999).             
               In Ianniello v. Commissioner, 98 T.C. 165, 182 (1992), we              
          rejected arguments under the Double Jeopardy Clause of the U.S.             
          Constitution that civil fraud additions to tax should not be                
          imposed on top of criminal forfeitures under the Racketeer                  
          Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.                  
          sections 1961-1968 (1988).  We concluded in that case that                  
          criminal forfeitures under RICO constitute punishment for                   
          commission of crimes while civil fraud additions to tax                     
          constitute remedial penalties.  We explained that a --                      

               fine and term of imprisonment imposed on the taxpayer                  
               after conviction for personal income tax evasion is                    
               punishment for the commission of a crime, and not                      
               reimbursement for costs incurred by the United States                  
               in investigating the taxpayer's fraud.                                 

          Ianniello v. Commissioner, supra at 183.                                    
               Petitioners argue that the decision in Ianniello v.                    
          Commissioner, supra, is distinguishable from the instant case               
          because Federal District Court judges have more discretion in               

Page:  Previous  1  2  3  4  5  6  7  8  9  Next

Last modified: May 25, 2011