305 371-8101

Sentencing Enhancements in Tax Case Upheld

U.S. v. MCKINNEY,  686 F.3d 432  (7th Cir. 2012)
Sentencing increase upheld.

Defendant, who pled guilty to conspiracy to defraud, impede, impair, obstruct, and defeat the functions of the IRS in the collection of income taxes, 18 U.S.C.S. §  371, tax evasion, 26 U.S.C.S. § 7201, and false statements to revenue agents, 18 U.S.C.S. §  1001, appealed two sentencing enhancements imposed by the United States District Court for the Southern District of Illinois.

At sentencing, defendant received a two-level enhancement to his base offense level for failing to report income exceeding $10,000 from criminal activity, U.S.S.G. Manual § 2T1.1(b)(1), that his wife received from a mortgage loan. The 7th Circuit held that the mortgage fraud conduct relevant to defendant's tax evasion, that he had a duty to report the income from the fraudulently obtained mortgage loan, and that the district court properly considered his failure to report as it fashioned its sentence. The district court also imposed a two-level enhancement for obstruction of justice, U.S. Sentencing Guidelines Manual § 3C1.1. The court ruled that defendant's false statements regarding his residence and employment status warranted an adjustment for obstruction of justice. Defendant made false statements to an IRS officer on three occasions that were material because they influenced or affected the issue under determination of whether defendant and his wife could afford to pay their taxes owed. The false statements temporarily thwarted the IRS's discovery of the criminality of the tax evasion and demanded additional government resources to uncover the fraud.

The court affirmed the sentence.