Paul L. Caron

Thursday, March 29, 2007

Further Developments in Biggest Tax Fraud Case in History

Developments since my blog post yesterday on Walter Anderson's sentencing in his tax fraud case: Biggest Tax Cheat in History Sentenced to 9 Years in Prison, But IRS Won't Be Repaid Because of Botched Plea Agreement:

Jack Townsend (Townsend & Jones, Houston) writes:

It appears that all that happened was that the plea agreement did not nail down restitution. Federal tax restitution is not generally allowed in tax cases unless it is provided in the plea agreement. Commonly, the resolution of the tax matter is not addressed by restitution in the plea agreement and is left to the ordinary civil processes that grind away after sentencing. The statute of limitations should stay open forever (e.g., by collateral estopple if an evasion conviction and by proof in other convictions). So, the IRS still has the ability to collect the taxes (assuming he has not frittered them away, but even if he has frittered them away a good restitution provision in the plea agreement would not help). It is not quite the disaster as a plain text reading of either your blog or the WaPo article. (Note, however, that the WaPo article does say: "IRS spokeswoman Peggy Thomas said the agency will "do everything in our power to get this money" from Anderson in civil proceedings;" that quote may not be intelligible to the average WaPo reader, but tax lawyers know that the mechanisms to collection the tax civilly are formidable indeed.)

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Thank you for posting this. It's sad that the false "IRS attorney blows hundreds of millions" headline made the mainstream media. I guess a sensational headline is better than a truthful one.

Posted by: AM | Mar 29, 2007 7:36:30 PM