YES, you can be. Terrible, but it happens. In a landmark case, the Supreme Court held that a conviction for willfully filing a false tax return is a deportable offense under our immigration laws. It reached the same conclusion with respect to a conviction for aiding and abetting in the preparation of a false return.
Background:
• Tax evasion is a felony punishable by a maximum fine of $100,000, five years imprisonment, or both.
• A person who willfully makes and signs any return, statement, or other document verified by a written declaration that it is made under the penalties of perjury and which he (includes she) does not believe to be true and correct in every material matter is guilty of a felony.
• A person who willfully assists, counsels, or advises in the preparation or presentation of a return, affidavit, claim or other document, which is fraudulent or is false as to any material matter is guilty of a felony.
Facts:
• Akio and Fusako Kawashima, both Japanese citizens, are lawful permanent residents of the US.
• Mr. Kawashima pleaded guilty to one count of willfully filing a false tax return.
• Mrs. Kawashima pleaded guilty to one count of aiding and assisting in the preparation of a false tax return.
• Following their convictions, the Immigration and Naturalization Service charged the Kawashimas with being deportable from the US as aliens who had been convicted of an aggravated felony.
• Aggravated felony is an offense that involves fraud or deceit in which the loss to the victim exceeds $10,000.
• In this case, the victim is the US government and the loss exceeded $10,000.
• Therefore, their conviction was considered as aggravated felony.
• At their deportation hearing, taxpayers argued that their convictions did not qualify as aggravated felonies.
• The Immigration Judge disagreed and ordered their deportation.
• They appealed to the Board of Immigration Appeals, which affirmed the Immigration Judge’s decision.
• In short, the taxpayers lost their case.
Supreme Court affirms. The case went up all the way to the Supreme Court which agreed with the Ninth Circuit that convictions in which the Government’s revenue loss exceeds $10,000 qualify as aggravated felonies.
• The Supreme Court rejected the Kawashimas’ argument that they could not be deported for the commission of an “aggravated felony” because their crimes did not involve fraud or deceit.
• The Court stated that the taxpayers involved in deceitful conduct when they knowingly and willfully submitted a tax return that was false as to a material matter.
• Mrs. Kawashima committed a felony involving deceit by knowingly and willfully assisting her husband’s filing of a materially false return.
• Their tax evasion case was therefore a deportable offense. Ouch.
Citation for further research: Kawashima v. Holder, Attorney General, (S Ct 2/21/2012) No. 10-577.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at [email protected].