The top charge in the federal election interference indictment against former President Trump alleges a conspiracy to defraud the government by impairing, obstructing and defeating the lawful federal governmental function of certifying presidential election results. That nontax conspiracy charge is based on the same precedent that undergirds many tax conspiracy charges.
On September 4, 2023, Tax Notes published an article on the topic and explored statutes and case law often used to prove conspiracy charges, namely Haas v. Henkel and Hammerschmidt v. United States, and how Trump’s case could impact the future of conspiracy charges in criminal tax cases. Gray Reed Partner Tony Box was one of the experts interviewed for the article. A lawyer and a CPA, Tony Box represents businesses and high-net-worth individuals in all types of civil and criminal tax controversies, white-collar defense cases, regulatory investigations, and enforcement actions focused on preventing government inquiries and minimizing business disruptions. Before joining Gray Reed, Tony was an Assistant US Attorney. He also has nearly a decade of experience as an FBI Special Agent.
Excerpt:
A Supreme Court opinion addressing Hammerschmidt in Trump’s case could be a huge disruption to tax conspiracy law, according to Anthony Box of Gray Reed & McGraw LLP. He pointed to Marinello and the reversal of the so-called Bridgegate convictions as strong indications that Trump’s case could spell the end of the current state of Klein.
It’s probably time for the Court to weigh in on defraud conspiracy issues, said Box, a former U.S. attorney. While prosecutors should be careful about when they charge Klein conspiracies, the Court should add some restrictions to the case law, he said.
If Trump’s challenge to defraud conspiracy law fails, the status quo will likely continue until another strong reason to question Klein conspiracies emerges, Box said. Even if the Court accepts Trump’s challenge and restricts Hammerschmidt and Klein conspiracies, tax prosecutors may still be able to use section 371 offense conspiracies to cover much of the same conduct when they can prove specific acts beyond mere omissions, he said.
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