Timely Prosecution

BY JEFFREY GILMAN

A return filing date is not the only benchmark for measuring the six-year time limit within which the government must begin a prosecution for tax evasion under IRC § 7201. Criminal defendant Leonard Widman found that out when the U.S. District Court for the District of Connecticut denied his motion to dismiss the government’s case alleging criminal tax evasion.

 

The statute of limitations of IRC § 6531 requires the government to bring an indictment for a charge of tax evasion under section 7201 within six years “after the commission of the offense.” The district court said the Second Circuit Court of Appeals (which includes Connecticut) has ruled that a prosecution under section 7201 “is timely if commenced within six years of the day of the last act of evasion, whether it is the failure to file a return or some other act in furtherance of the crime” (emphasis added). See U.S. v. DiPetto (936 F.2d 96 (1991)). The court cited several other circuits that agree with this view.

 

Widman, who was charged with criminal tax evasion for returns filed for 1997, 1998 and 1999, argued the court should dismiss the government’s case because the returns were filed on or before March 27, 2002—more than six years prior to the indictment, which was filed on Sept. 24, 2008. His motion argued the filing of the returns was the last affirmative act of evasion that completed the alleged crimes. The government’s indictment, however, asserted that Widman made material misrepresentations to IRS special agents on March 28, 2003, April 2, 2003, and Aug. 5, 2004.

 

The court said the Second Circuit in U.S. v. Klausner (80 F.3d 55 (1996)) recognized false statements to Treasury officials as an affirmative act of evasion that triggers the statute of limitations. The assertion of false statements in the indictment, if proved beyond a reasonable doubt at trial, would place the charges within the limitations period. Therefore, the court rejected the motion to dismiss the case on its face. The court did grant Widman leave to renew the motion in the context of a motion for judgment of acquittal at trial.

 

  U.S. v. Widman , U.S. District Court for the District of Connecticut, docket no. 3:08CR194, 2/18/09

 

By JofA staff member Jeffrey Gilman, Esq.

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