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The use of obstruction charges scrutinized in tax case

Obstruction of justice charges are often catchall, broadly-worded provisions. In recent years, the U.S. Supreme Court has been scrutinizing how the Justice Department uses these charges.

The most recent case along these lines relates to a conviction for obstructing the administration of tax laws. The justices may continue to narrow the scope of some white-collar prosecutions in this tax case.


How serious was the conduct?

Because of the nature of obstruction statutes they can be over broad and mete out serious punishment for throwing undersized fish overboard or arranging a meeting.

The case of Yates v. United States, narrowed the rule that prohibits destroying “any record, document or tangible object” to only physical items that hold information. Thus throwing fish overboard was insufficient to sustain a conviction.

McDonnell v. United States, related to the conviction of a former governor who received a large gift that purportedly violated federal bribery law. The court overturned the conviction finding that “arranging a meeting or contacting another official” didn’t rise to level of an “official act.” This case also expressed concerns that the court could not “construe a criminal statute on the assumption that the government would use it responsibly.”

The tax angle

The owner of a courier service failed to pay individual or company taxes for many years. His business practices included using business finds to pay personal expenses, throwing away bank statements and receipts and paying employees in cash.

In the case, the taxpayer effectively admitted to failing to file or pay individual or company taxes. He objected to the felony obstruction charge that carried a penalty of up to three years in prison. A failure to file charge is generally a misdemeanor.

The Supreme Court will look at whether the obstruction provision catches too much. As one of the Second Circuit judges wrote in dissent a narrower reading may be necessary, so that “prosecutors must encounter boundaries to discretion, so that no American prosecutor can say ‘Show me the man and I’ll find you the crime.’”

We will update readers as oral arguments and a decision issue in the court's next term.

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