If you have paid any attention to national political news over the last few months, the term "obstruction of justice" has been mentioned a number of times. To the uninitiated, federal law is broadly defined to punish conduct that affects the "due administration of justice." This largely means that conduct that would adversely affect a pending judicial proceeding or law enforcement investigation may be considered a crime punishable under federal law.
But when it comes to obstructing justice with regard to tax administration, what type of conduct may be punished? Moreover, does a person have to be under investigation or subject to an IRS audit before obstruction occurs?
This question has become especially important given the concern that the U.S. Supreme Court has expressed when federal prosecutors have used such broad definitions to criminalize innocent acts or bring severe penalties for illegal, yet benign conduct.
Against this backdrop, the high court has agreed to hear the case of a defendant who was sentenced to three years in federal prison for tax evasion and obstruction of justice. The defendant admitted to failing to file tax returns, but pled not guilty to obstruction under the "omnibus clause," which criminalizes acts to obstruct the administration of IRS rules. At trial, the defendant asked the court to instruct the jury that the prosecutors should prove that he knew that an IRS investigation was currently underway, and because of it, the defendant destroyed documents. The judge declined, and the defendant was convicted.
The Supreme Court's reading of the case may follow others where prosecutors have gone too far and abused their discretion. The case also exemplifies the need for an experienced tax attorney when the federal government brings criminal tax charges.