In United States v. Renner, ___ F.3d ___, 2011 U.S. App. LEXIS 16331 (8th Cir. 2011), here, the defendant asserted a Cheek type good faith defense. The argument was that the defendant had relied upon his tax attorney. The tax attorney gave favorable testimony, but the jury did not accept the good faith defense. The tax attorney renewed his favorable testimony, by letter, for sentencing. The district judge apparently good faith related to the attorney consulation for sentencing.
The facts, highly summarized, were as follows: The taxpayer operated a business through a single-member LLC which was disregarded and treated as a Schedule C entity. The business he ran was to provide something like a debit card service for certain types of purchases. The business was not a bank and did not require that he do anything with his clients' cash deposits other than have a general obligation to apply them when the clients drew them. In other words, he could deposit them into the general business account and, herein lies the rub, use them in the interim as he saw fit. He did see fit and used them for various nonbusiness purposes (living expenses, etc.) The defendant was indicted for tax evasion for initially not filing and then filing delinquent returns omitted the income that he lived on from the customers' cash.
Read more »
No comments:
Post a Comment