United States v. Parker, 2009 U.S. App. Lexis 28042 (5th Cir. Dec. 21, 2009)
Thomas and Margaret Parker appealed their convictions for filing false tax returns and for filing returns in violation of IRS Code sections 7206(1) and 7203.
To support a conviction for filing a false tax return under section 7206 (1) the evidence must be sufficient to show that: (1) the defendant willfully made and subscribed to a materially false tax return; (2) the return contained a written declaration that it was made under penalties of perjury; and (3) the defendant did not believe that the return was true as to every material matter.
Parker argued that he did not "willfully" defraud the government. He asserted that he had "legitimate confusion" but his argument ignored the fact that a CPA informed Parker that he owed taxes. Further, Parker acknowledged the debt by entering an installment agreement.
Thus the record supported the finding that Parker knew that the 1040-x returns he filed under reported his income.
Section 7203 requires a showing that (1) taxpayer was required to file a return; (2) that he failed to file a return; and (3) that the failure was willful.
The evidence established that Parkers had substantial income from multiple sources. The evidence that Mrs. Parker was guilty of complicity in the tax fraud was established through a former IRS agent testifying as an expert.
The agent testified that she interviewed Mrs. Parker and identified her notes from the interview. The evidence was admitted as a hearsay exception.
Mrs. Parker could have avoided the conviction and possibly the indictment by simply exercising her 5th amendment rights. Her misguided belief that if she cooperated, the IRS would leave her alone is a mistake made by many taxpayers and inexperienced professionals.
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