Obstructing by Omission: The Troubling Expansion of the Criminal Offense of Obstructing the IRS and How DOJ Internal Policy Has Played a Role
57 Pages Posted: 9 Oct 2017 Last revised: 14 Nov 2017
Date Written: August 18, 2017
A majority of circuits hold that it is possible to be convicted of corruptly obstructing the administration of the Internal Revenue laws even if there is no pending IRS proceeding to obstruct. Even more strikingly, the Second Circuit recently held that making an omission is sufficient to obstruct the IRS, which means that it is a federal felony to corruptly not maintain records or to corruptly not provide records to an accountant. Despite the obvious potential problems with these issues, there is very little recent scholarship addressing them. In June, the Supreme Court granted certiorari to consider these issues.
This article examines the circuit split over whether 26 U.S.C. § 7212(a), interfering with the administration of the Internal Revenue laws, requires that the defendant obstructed a known IRS proceeding. Only the Sixth Circuit has imposed such a requirement, and even that court has twice reversed itself on the issue. Further, the Department of Justice limits charges under § 7212(a) to conduct that is prototypically “obstructive.” These policy limitations have caused only prototypically obstructive cases to reach the courts, and have therefore ensured that constitutional overbreadth challenges to the statute necessarily fail.
Notwithstanding the majority of opinions on the issue, this article explains that the logical reading of § 7212(a) requires that, to obstruct the IRS, the defendant must have been aware of a pending IRS proceeding. Without this requirement, other crimes carefully delineated in the federal tax code would become superfluous, and individuals would be subject to a vast new array of previously uncontemplated criminal tax prosecutions. Moreover, this limitation is consistent with the Supreme Court’s interpretation of the nearly-identical general obstruction of justice statute. Unless § 7212(a) is limited to conduct that obstructs a pending IRS action, the statute will be unconstitutionally overbroad.
Keywords: tax, criminal law, obstruction, 7212, 7212(a), IRS, constitutional law, overbreadth, Internal Revenue Service, Department of Justice, Tax Division
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