IN A landmark case, the Supreme Court has 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 assisting in the preparation of a false return.
– Tax evasion is a felony punishable by a maximum fine of $100,000, five years imprisonment, or both.
– A person who willfully makes and signs any return, statement, or other document verified by a written declaration that it is made under the penalties of perjury and which he (includes she) does not believe to be true and correct in every material matter is guilty of a felony.
– A person who willfully assists, counsels, or advises in the preparation or presentation of a return, affidavit, claim or other document, which is fraudulent or is false as to any material matter is guilty of a felony.
– Akio and Fusako Kawashima, both Japanese citizens, are 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 one count of 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 had been convicted of an aggravated felony.
– Aggravated felony is an offense that involves fraud or deceit in which the loss to the victim exceeds $10,000.
– In this case, the victim is the U.S. government and the loss exceeded $10,000.
– Therefore, their conviction was considered as aggravated felony.
– At their deportation hearing, taxpayers argued that their convictions did not qualify as aggravated felonies.
– The Immigration Judge disagreed and ordered their deportation.
– They appealed to the Board of Immigration Appeals, which affirmed the Immigration Judge’s decision.
– In short, the taxpayers lost their case.
Supreme Court affirms
The case went up all the way to the Supreme Court which agreed with the Ninth Circuit 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.
– Their tax evasion case was therefore a deportable offense. Ouch.
(Citation: Kawashima v. Holder, Attorney General, (S Ct 2/21/2012) No. 10-577.)
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Victor Santos Sy, CPA, MBA, provides professional services in accounting and tax controversy including IRS audit defense and offers in compromise. He also advises clients on choices of entity including corporations for small businesses and LLCs for rentals. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation at 704 Mira Monte Place, Pasadena, CA 91101. The firm celebrates its 35th anniversary this year. You may email tax questions to Vic at email@example.com. You are welcome to visit our website for more than 300 tax tips at www.victorsycpa.com.