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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
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Last modified: May 25, 2011