Attorney-at-Law

THE COVER-UP – UNCOVERED

In Uncategorized on 04/24/2013 at 16:12

Remember poor Ray Fouche, the bus operator victimized by the late and infamous Manzoor Bey? No? Then see my blogpost “The Cover-up”, 11/23/11, wherein I retold Ray’s sad tale and lauded her legal team for convincing Judge Vasquez to let Ray off the hook for the unpaid payroll taxes which the late and infamous Manzoor Bey stole.

Unhappily for Ray and her team, Second Circuit wasn’t having it. And now Ray is remanded to Tax Court to have the unpaid taxes taken out of her hide.

See City Wide Transit Inc. v. Com’r, Docket No. 12–1040–ag, decided 3/1/13, Judge Wesley.

“Some have suggested that the Commissioner of Internal Revenue (“Commissioner”) rarely loses in tax court, tax court decisions are rarely appealed, and federal circuit courts rarely reverse tax court decisions. See, e.g., James Edward Maule, Instant Replay, Weak Teams, and Disputed Calls: An Empirical Study of Alleged Tax Court Judge Bias, 66 Tenn. L. Rev. 351, 353, 401 (1999) (reviewing empirical studies). Despite some of these expectations, after losing in tax court, the Commissioner appealed, and we now reverse.”

Ray’s team argued Manzoor filed false returns to cover up his embezzlement, not to defraud the US of A. Irrelevant, says Judge Wesley.

“By concluding that the Commissioner failed to prove that Beg intended to evade City Wide’s taxes and that, at best, tax evasion was but an ‘incidental,’ ‘secondary effect’ to Beg’s embezzlement scheme, the tax court inappropriately substituted motive for intent. The statute is agnostic as to the attendant motivations for submitting a fraudulent return and only requires that the Commissioner prove a fraudulent return was filed with an intent to evade, that is avoid, paying a tax otherwise due. Thus, ‘if one of [a conspiracy’s] objectives, even a minor one, be the evasion of federal taxes, the offense is made out, though the primary objective may be concealment of another crime.’ Ingram v. United States, 360 U.S. 672, 679–80, 79 S.Ct. 1314, 3 L.Ed.2d 1503 (1959). Moreover, ‘if a “tax evasion motive plays any part” in certain conduct, an “affirmative willful attempt” to evade taxes may be inferred from that conduct.’ United States v. Klausner, 80 F.3d 55, 63 (2d Cir.1996) (quoting Spies v. United States, 317 U.S. 492, 499, 63 S.Ct. 364, 87 L.Ed. 418 (1943)). The Commissioner only had to prove that Beg intended to underpay the Commissioner taxes that City Wide owed when he filed a fraudulent return on City Wide’s behalf, not that he intended to avoid City Wide’s taxes for City Wide’s benefit.”

Sorry Ray and team, you get a first-class Taishoff “good try”. But IRS gets the money.

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