U.S. Supreme Court: Understatement Can Be Aggravated Felony Regardless of Restitution

02/27/12

What goes by in this particular case are the facts and circumstances of the case, the fact that these are legal immigrants and not illegal immigrants, and the fact that the rule of law upheld and affirmed applies as much to legal citizens as to legal immigrants. The fact that the ruling came in the course of tax proceedings related to immigrants and the judgment ordered a penalty specific to immigrants does a lot in diverting attention from the fact that the ruling is as much relevant and ominous for all citizens in U.S.A.

Forget just for a moment that the case, ruling, and sentence pertain to a couple of legal immigrants, and concentrate on the fact that the ruling pertains to persons under the tax law, something that concerns all citizens. In fact both the law and the ruling (except the type of penalty applicable) would have been the same if instead of immigrants it was a couple of American citizens facing the court in this case.
Empirical Facts in Short:
1. Married couple running business from 1984 – underreported business income in 1991
2. IRS charges them with $245,000 in taxes and penalties – restitution is made in full by the offenders
3. In 2001 INS decides to deport them (mind you this is where you might get misled and think it is all about immigrants, it is not)
4. In 2012, the U.S. Supreme Court decides that such a tax crime is an “aggravated felony,” subjecting an immigrant to automatic deportation
The Consequences on All:
Regardless of its “immigrant” angle, the fact that the U.S. Supreme Court has held an underreporting for which restitution of taxes, fines, and penalties had been made in full, as an “aggravated felony” open to further punishment a decade after the IRS having accepted the restitution and cleared the tax files raises concerns. For such an angle can be taken by other agencies, once this ruling is cited in other cases including those faced by citizens.
The conclusion of the court was that the accused had “knowingly and willingly submitted a tax return that was false… therefore had committed a felony that involved ‘deceit.’”
Considering the fact that all tax returns filed by citizens need to be signed as true to the knowledge of the submitter – it can be interpreted that every mistaken submission, or wrong submission of tax for which restitution has been made, can later be construed as “aggravated felony” post restitution.
Though experts of the opinion that the ruling would apply only to criminal tax violations and not to civil claims, the consequences are bound to be far-reaching. In a nutshell, the ruling makes clear that every conviction in which the government’s revenue loss exceeds $10, 000 will qualify as aggravated felony, even without fraud or deceit.
The same concerns that we feel might be the true effects of this judgment upon citizens was reflected by dissenting Justice Ruth Bader Ginsburg, who noted, “Rendering all tax offenses involving false statements ‘aggravated felons’ … is all the more problematic, for many of these offenses are misdemeanors.” Justices Stephen Breyer and Elena Kegan also supported the dissent.