Full Disclosure

9th Cir. Unpublished Case Indicating Full Disclosure as a Prerequisite to use of a “following in good faith” exception to “willful intent.” (9/11/2019)

USA V. Walter Prezioso (9th Cir. 2019) Unpublished, No.18-50056. (http://cdn.ca9.uscourts.gov/datastore/memoranda/2019/07/25/18-50056.pdf) Full Disclosure was set up in a jury instruction as a prerequisite to a “following in good faith” exception to ” willful intent.” Defense objection was had, but to no avail.

Without stating it explicitly, the key issue in this case seemed to have been an implied allegation that the taxpayer didn’t tell the “whole story” to the accountant at the time the advice was sought. Of what does this case remind? If you make up a justifying fairy-tale and are then told that your fairy-tale justifies a path advantageous to you, it detracts from any “advice-of-accountant” justification. In the Supreme Court holding in Cheek v. United States, 498 U.S. 192, 200 (1991), the only mention of “advice-of-accountant” was:

“However, if the person was told by a lawyer or by an accountant erroneously that the statute is unconstitutional, and it’s my professional advice to you that you don’t have to follow it, then you have got a little different situation.”

Thus, the “advice-of-accountant” example in Cheek was an opinion of a tax practitioner based upon constitutionality, and not upon disclosure of a taxpayer’s particular circumstance. The lesson of Prezioso is clear, especially in a high tax jurisdiction like Los Angeles County, which includes Long Beach, California, and Orange County, which includes Los Alamitos, California.
(1) a taxpayer should disclose all of the pertinent facts to the tax advisor, and preferably have the tax advisor investigate to make certain of the facts.
(2) a taxpayer should also know that the intake forms and correspondence of any “incomplete disclosure” will likely readily be available to the court.
(3) As in Prezioso, any hint of omissive manipulation by taxpayer will be used in an instruction to negative the benefit of “good faith”.

Cheek dealt with a tax defier that manifested a good faith belief that labor earnings were not subject to tax. There was no intervening “advice-of-accountant” mechanism in Cheek. The fact that defendant’s proposed expert on accountant duties was denied the right to testify indicates that the accountants failure was a non-existent non-relevant matter in this case.

Bio: Curt Harrington advises tax clients in Los Angeles County and Orange County, California and may be reached locally as shown on the business web site https://patentax.com/ . His background is more completely seen on the biography page https://patentax.com/curt/ .

Curt looks forward to advising tax debtors and business startups in the Long Beach, California area, particularly with an approach to helping structure business relationships to reduce the negative economic exposure of the startup entrepreneur in opposition to government authorities that endanger startup principals. Curt looks forward to speaking with you at (562)594-9784.

Other Sections within a Tax Debt Approach Blog Include:
Instructive Warning Cases
Bankruptcy & Offer-In-Compromise – The Hot Dog Stand Paradigm
A Tax Debt Only Comparison of Offer-In-Compromise and Chapter 7 Bankruptcy in California Graduating From a Homelessness Base Case
How Far Can You Delay Paying Federal Tax Authorities Before Criminal Tax Evasion Charges are Filed?
Taxpayer First Act Credit Card Trap
There are Usually 6 Tax Choices At Any Given Point In Time

Tax Evasion Avoidance Learning Blog : https://rebrand.ly/TaxEvasionAvoidance ; articles include other articles:

USA V. RODRIGO LOZANO – Memorandum Opinion Invites Further Analysis (9/13/2019)

Full Disclosure (9/11/2019)

Civil Effect (9/28/2019)

Curt’s CriminalLaw.com Articles:

The Reentry Teachings of U.S. v. Vicente Cuevas-Lopez (9th Cir. 2019) (9/20/2019)

Why Judges Control Electronics Strictly (9/15/2019)

USA V. RODRIGO LOZANO – Memorandum Opinion Invites Further Analysis (9/13/2019)

Prerequisites for Imposing a Time Payment Fee Were Not Met (9/12/2019)

9th Cir. Unpublished Criminal Tax Evasion Case Indicating Full Disclosure as a Prerequisite to use of a “following in good faith” exception to “willful intent.” (9/11/2019)

New 9th Cir. Case With Potential Tax Evasion Effect – Civil Admissions Become Prosecutor Weapon against Non-Testifying Defendants (9/8/2019)

Know & Use the Burden of Proof in the Best Way (9/5/2019)

How Far Can You Delay Paying Federal Tax Authorities Before Criminal Evasion Charges are Filed? (8/10/2019)

Character (Habit)Evidence Can Show Impulsivity, But Not Simply Evidence Of Brain Injury (7/24/2019)

US v. RAYMOND LAMBIS ORDER TO SUPRESS STINGRAY TRACKING (DC SDNY) (7/18/2016)

9th Circuit Rejects “One Day Late Rule” for Late Filed Return Tax Dischargeability (7/18/2016)

Unpublished 9th Cir. Case shows (1) that KNOWLEDGE instruction for 18 USC §1001 can be waived; & (2) even ambiguous agent notes & no recording can get a conviction – Use Right To Silence!! (2/1/2015)

Other Articles Outside this blog:
Debt Control Extensive Outline (8/14/2019)

Pre-Startup Efficiency – Introduction (Parts 1&2) (2016)

9th Circuit Rejects “One Day Late Rule” for Late Filed Return Tax Dischargeability (2016)

Give My Start-Ups a Break! (2015)



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Tax Evasion Cases Discussion

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