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Court Joins Majority in Tax Loss Calculation Circuit Split

By Jonathan Byrne

US v. Delfino: The Delfinos (husband and wife) ran several computer consulting businesses. The income generated by those businesses, rather than being taken directly by the Delfinos, was put into several trusts. Neither the Delfinos nor the trusts paid taxes on that income. After an audit (with which they refused to cooperate), the Delfinos were indicted for mail fraud and attempted tax evasion. At trial, they relied on a good faith defense based on the advise of a "trust promoter and self-described tax consultant." The jury rejected that defense and convicted the Delfinos on all counts. At sentencing, the tax loss was based on the audit with which the Delfinos did not cooperate and did not take into account deductions which they would have been entitled to take had they paid their taxes on time...continue to full post

Full post as published by Fourth Circuit Blog on December 19, 2007 (boomark / email).