Washington, D.C. – The Supreme Court this week issued a ruling protecting all Americans from prosecution for vaguely defined tax crimes. In the case of Carlo Marinello, II v. United States, it clarified a broad statute regarding who can be charged with criminal conduct for obstructing the IRS’s administration of the tax code. Cause of Action Institute (“CoA Institute”) filed an amicus curiae brief in support of Mr. Marinello’s petition for Supreme Court review, and another one during the merits stage, urging a narrow reading of the statute to ensure no one could be charged under it without knowing that he is committing a felony.
CoA Institute President John J. Vecchione: “As Justice Breyer noted, the law Mr. Marinello was charged under could be interpreted to make felonies of routine conduct by everyday American taxpayers and business owners, such as failing to report a payment to a babysitter. Without this important decision, sloppy tax filers could be charged with obstruction with just an allegation that the conduct helped the defendant avoid tax liability. We applaud the Court for reining in such broad and potentially abusive prosecutorial authority, and Cause of Action is proud of its efforts in this result.”
Mr. Marinello owned a small courier service in New York. In 2012, the United States obtained an indictment against him under the criminal tax code, arguing that Mr. Marinello could be guilty of corruptly obstructing or impeding the administration of the tax code by performing acts as common as failing to maintain books and records for his small business, failing to provide his accountant with complete information, and discarding business records, all because he did these acts with the goal of not paying taxes. However, the tax code already outlaws tax evasion, and it requires that the government prove a heightened criminal intent—that the defendant acted “willfully.”
During oral argument, the Court showed enormous skepticism towards the Government’s position that virtually any act or omission, no matter how slight, could subject one to felony conviction, even though the particular tax code penalties for those actions are misdemeanors. In the Court’s opinion, Justice Stephen Breyer wrote “Just because a taxpayer knows that the IRS will review her tax return every year does not transform every violation of the Tax Code into an obstruction charge.”
The full opinion can be found here.
For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org.
