The U.S. Supreme Court issued a decision Tuesday holding that a conviction under Sec. 7206 for willfully filing a false tax return (or for aiding and abetting filing a false tax return) is an aggravated felony that can result in deportation.
Kawashima v. Holder, S. Ct. Dkt. No. 10-577 (U.S. 2/21/12), involved a Japanese resident alien couple who were appealing their deportation under 8 U.S.C. §1227(a)(2)(A)(iii) as aliens who had been convicted of an aggravated felony based on their convictions under Sec. 7206. The couple argued that 8 U.S.C. §1101(a)(43)(M)(i), which defines “aggravated felony” for these purposes, required that the offense of which they had been convicted involve fraud or deceit. Because Sec. 7206 does not contain fraud or deceit as a formal element of the crime, the couple argued that their conviction was not an aggravated felony.
The couple also argued that clause (i) of the statute did not apply to them because it requires “fraud or deceit in which the loss to the victim or victims exceeds $10,000,” language that the couple argued was not intended to apply to tax crimes, especially in light of 8 U.S.C. §1101(a)(43)(M)(ii), which defines a separate, different crime of tax evasion under Sec. 7201 in which the loss to the government exceeds $10,000.
The Supreme Court, in an opinion by Justice Clarence Thomas joined by Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, Samuel Alito, and Sonia Sotomayor, held that the crime of willfully making and subscribing a false tax return and the crime of willfully aiding and assisting the preparation of a false tax return are deportable offenses under clause (i) because they necessarily entail deceit.
The Supreme Court also rejected the couple’s argument that clause (i), if read together with clause (ii), should not apply to tax crimes, in particular because clause (i) addresses “loss to the victim,” whereas clause (ii) involves “revenue loss to the Government.” The Court explained that the inclusion of Sec. 7201 as a specific aggravated felony in clause (ii) did not mean that it was the only tax crime that Congress meant to invoke, but that Congress added clause (ii) to ensure that tax evasion would be included as an aggravated felony subject to deportation.
—Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.
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