Can you be deported for filing false tax returns?

YES, you can be. It’s terrible, but it happens. In a landmark case, the Supreme Court held that a conviction for willfully filing a false tax return is a deportable offense under our immigration laws. It reached the same conclusion with respect to a conviction for aiding and abetting in the preparation of a false return.

Facts of Case:

• Akio and Fusako Kawashima, both Japanese citizens, were lawful permanent residents of the U.S.

• Mr. Kawashima pleaded guilty to one count of willfully filing a false tax return.

• Mrs. Kawashima pleaded guilty to aiding and assisting in the preparation of a false tax return.

• Following their convictions, the Immigration and Naturalization Service charged the Kawashimas with being deportable from the U.S. as aliens who have been convicted of aggravated felony.

• Aggravated felony is an offense that involves fraud or deceit in which the loss exceeds $10,000.

• The loss exceeded $10,000; therefore, their convictions were considered as aggravated felonies.

• At their deportation hearing, they argued that their convictions were not aggravated felonies.

Court Decision:

• The Immigration Judge disagreed with taxpayers and ordered their deportation.

• They appealed to the Board of Immigration Appeals which affirmed the Judge’s decision.

• The case went up all the way to the Supreme Court which agreed that convictions in which the Government’s revenue loss exceeds $10,000 qualify as aggravated felonies.

• The Supreme Court rejected the Kawashimas’ argument that they could not be deported for the commission of an “aggravated felony” because their crimes did not involve fraud or deceit.

• The Court stated that the taxpayers involved in deceitful conduct when they knowingly and willfully submitted a tax return that was false as to a material matter.

• Mrs. Kawashima committed a felony involving deceit by knowingly and willfully assisting her husband’s filing of a materially false return.

• In short, the taxpayers lost. Their tax evasion case was therefore a deportable offense. Ouch.

Lesson:

• Tax evasion is a felony punishable by a maximum fine of $100,000 or five years imprisonment.

• A person who signs a tax return that is false as to any material matter is guilty of a felony.

• It becomes aggravated felony when loss to the government exceeds $10,000 – a deportable offense.

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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.

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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies.  He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at vicsy@live.com.

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