Questions About New DOJ Tax Policy On FBAR Sentencing Guidelines (12/11/17)I recently posted on the new DOJ Tax position as to the Sentencing Guidelines calculations for FBAR crimes. See More on New DOJ Tax Position on FBAR Sentencing Guidelines (Federal Tax Crimes Blog 11/9/17), here; and Another FBAR Plea And Notice of Government Change of Position on Applicable Guidelines (Federal Tax Crimes Blog 10/27/17), here. I am preparing an update for the next supplement of FBAR plea Guidelines in my chapter 12, titled Criminal Penalties and the Investigation Function, in Michael Saltzman and Leslie Book, IRS Practice and Procedure (Thomsen Reuters 2015). I have hit upon some issues for which I don't know the answers.
Assume that the taxpayer had an FBAR violation for 4 years -- years 01 - 04 -- involving unreported account of $1,000,000 in each of the 4 years. The taxpayer also had a tax loss in each of the 4 years related to the account of $13,333 per year resulting from the omission of $40,000 interest income per year (aggregating $53,333 tax loss for all 4 years). The taxpayer pleads to a one year FBAR count for year 04.
Under SG § 2S1.3(a), the Base Offense Level is 6 plus the incrementing levels in the Theft Loss table in § 2B1.1. The question is whether the 3 years to which the taxpayer did not plead (i.e., years 01 - 03 at amounts of $1,000,000 in each year) is relevant conduct that must be considered in applying the table in § 2B1.1? If so, the number for the table is $4,000,000 (including 01 - 04) and the Base Offense Level is 24. If not, the number for the table is $1,000,000 (only 01, the year of conviction) and the Base Offense level is 20.
The nonconviction years (Years 01 - 03) seem to fit the requirements for relevant conduct in § 1B1.3. Relevant conduct includes:
(2) solely with respect to offenses of a character for which §3D1.2(d) would require grouping of multiple counts, all acts and omissions described in subdivisions (1)(A) and (1)(B) above that were part of the same course of conduct or common scheme or plan as the offense of conviction.I won't work through the grouping rules, but I am sure that they would require grouping. (For example, if the count of the plea had been to tax evasion, the tax loss in the nonconviction years 01 - 03 would be included as relevant conduct.)
So, it looks like the nonconviction years would be relevant conduct for the conviction year and the FBAR amounts would be included in the § 2B1.1 calculation.
This raises the second question. Are the tax loss amounts relevant conduct for the FBAR violation?
And the third question. If the plea had been to a tax violation (e.g., single year tax evasion), would the Base Offense Level under § 2T1.1 include the FBAR violations? If so, how would they be considered (the tables increment on different bases, thus like comparing apples to oranges).
I would appreciate hearing from anyone knows the answers or has any thoughts as to these questions. Please let me know either by comment or by email to [email protected]
In this regard, the JD Supra article said that DOJ Tax would be issuing some type of guidance soon, so we may have to await that.