Opinion recap: Court holds that filing false tax return is a deportable offense
on Feb 22, 2012 at 4:42 pm
Yesterday, the Court issued its decision in Kawashima v. Holder, holding that filing a false tax return is grounds for deportation.
The petitioners in the case, Mr. and Mrs. Kawashima, had been lawful permanent residents of the United States since 1984. In 1997, Mr. Kawashima was convicted of filing, and his wife was convicted of helping him to file, a false corporate tax return that understated their income and therefore deprived the government of owed tax revenue – violations of Section 7206 of the tax code.
A provision of immigration law allows the government to deport anyone who is convicted of an “aggravated felony.” Originally, the term was defined narrowly to include crimes like murder and drug trafficking. But over time, Congress has expanded the definition, so that it now includes any offense that “(i) involves fraud or deceit in which the loss to the victim or victims exceeds $10,000; or (ii) is described in section 7201 of title 26 (relating to tax evasion) in which the revenue loss to the government exceeds $10,000.”
Because the Kawashimas were convicted of filing a false return (a violation of Section 7206 of the tax code), rather than tax evasion (a violation of Section 7201), they were not subject to deportation under the second part of the definition quoted above. Nonetheless, the government initiated deportation proceedings against them on the theory that filing a false tax return is a form of “fraud or deceit” within the meaning of the first part of the definition.
The Board of Immigration Appeals held, and the Ninth Circuit agreed, that the couple had committed a deportable offense.
The Court’s opinion
The Court granted the Kawashimas’ petition for certiorari, and yesterday the Court — in an opinion by Justice Thomas – affirmed. The Court first held that filing a false tax return is a crime involving “fraud or deceit” because even though neither fraud nor deceit is an express element of the tax offense, to prove the tax offense the government must show that the defendant made a materially false statement on his return, knew that the statement was false, and had a specific intent to violate the law. Those elements, the Court held, add up to deceitful conduct within the meaning of the deportation provision.
The Court also rejected the Kawashimas’ claim that by specifically mentioning one form of tax offense (tax evasion) as a ground for deportation, Congress implicitly excluded other kinds of tax offenses, even if they involved fraud or deceit. Instead, the Court concluded that Congress was probably concerned that courts might think that tax evasion does not involve fraud or deceit, particularly in light of an older Supreme Court decision in which the Court had held that tax evasion is not subject to the extended statute of limitations that applies to offenses “involving the defrauding or attempting to defraud the United States.” And, the Court noted, it is sometimes possible (although not common) to commit tax evasion without actually making any affirmative false statement to the government.
Justice Ginsburg wrote a dissent, which was joined by Justices Breyer and Kagan. In the dissent’s view, the Court’s broad construction of the first clause regarding “fraud and deceit” effectively renders the next provision’s specific treatment of tax evasion surplusage, since tax evasion will almost always involve making knowingly false statements to the government. That is why, Justice Ginsburg argued, courts treat tax evasion as a crime of “moral turpitude” and hold that a criminal conviction for tax evasion estops a defendant from denying that he engaged in fraud in a subsequent civil fraud suit. The dissenters also worried that the Court’s opinion would broadly subject immigrants to deportation for a broad range of less serious tax offenses that could be characterized, under the majority opinion, as involving some form of fraud or deceit.