The New Provision for Tax Restitution and Ex Post Facto

In United States v. Crim, 2014 U.S. App. LEXIS 1039 (3d Cir. 2014), here, the Third Circuit [enhanced version available to lexis.com subscribers] rejected as premature the defendant's claim that the order of tax restitution violated the Constitution's Ex Post Facto prohibition because, in his case, the order for restitution would invoke the new procedures for immediate tax assessment which were not in existence when the conduct of the convicted offense occurred. In the nonprecedential decision, the Third Circuit summarily rejects the argument as premature at the sentencing phase.

Crim claims his sentence violated the Ex Post Facto Clause of the United States Constitution, which states: "No bill of attainder or ex post facto Law shall be passed." U.S. Const. art. I, § 9, cl. 3. This Clause proscribes laws that change a punishment and inflict a greater punishment than the standards in effect when the crime was committed. Peugh v. United States, 133 S.Ct. 2072, 2077-78 (2013) [enhanced version available to lexis.com subscribers], (quoting Calder v. Bull, 3 U.S. 386, 390 (1798)) [enhanced version available to lexis.com subscribers].

After Crim's conviction, Congress passed the Firearm Excise Tax Improvement Act of 2010. Among other things, the law authorizes the IRS to use its administrative powers to collect on criminal restitution when the Government is the victim by treating the criminal restitution as a tax. See 26 U.S.C. § 6201(a)(4) [enhanced version available to lexis.com subscribers]. Before 2010, the IRS could receive restitution payments like any other victim entitled to criminal restitution but it lacked the authority to actively collect restitution. Because the IRS lacked this authority when Crim participated in the conspiracy, he claims this subsection is an unconstitutional ex post facto law as applied to him.

Crim's argument is best described as contingent and premature, touching as it does on an enforcement mechanism that the IRS has not yet employed to collect the restitution Crim owes to the United States. If the IRS chooses to use this power against Crim, he may challenge its legality at that time. Nothing in the restitution order before us implicates the IRS's collection authority under 26 U.S.C. § 6201(a)(4).

Restitution would implicate the Ex Post Facto clause only if it were criminal punishment. And if it were criminal punishment, logically, under Apprendi v. New Jersey [enhanced version available to lexis.com subscribers], 530 U.S. 466 (2000), here, the factual bases for restitution would need to be determined by a jury beyond a reasonable doubt rather than by the judge by a preponderance of the evidence.

View Jack Townsend's opinion in its entirety on the Federal Tax Crimes blog site.

For additional insight, explore Tax Crimes, authored by Jack Townsend and available at the LexisNexis® Store

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