Shapiro Arato Files Amicus Brief in Support of Supreme Court Challenge to Tax Code’s Obstruction Provision

On September 8, 2017, Shapiro Arato filed a brief in the United States Supreme Court for the New York Council of Defense Lawyers (“NYCDL”) as amicus curiae in support of the petitioner in Marinello v. United States, No. 16-1144.  NYCDL, of which partner Alexandra A.E. Shapiro is former President, is a not-for-profit professional association of approximately 300 lawyers, including many former federal and state prosecutors, whose principal area of practice is the defense of criminal cases in the federal courts of New York.

The question presented in Marinello is whether a conviction under the so-called “Omnibus Clause” of 26 U.S.C. § 7212(a) for corruptly endeavoring to obstruct or impede the due administration of the tax laws requires proof that the defendant acted with knowledge of a pending IRS proceeding.

We argued in the amicus brief that the Omnibus Clause must be narrowly construed to avoid the constitutional problems presented by the Second Circuit’s sweeping interpretation, which permits prosecutions even where there is no pending IRS proceeding. Section 7212(a)’s indeterminate language, if not cabined, fails to provide fair notice to defendants and presents substantial opportunities for prosecutorial abuse.  Under the Second Circuit’s broad reading of the Omnibus Clause, virtually any conduct that might make the IRS’s job harder could be a felony.

Drawing extensively on our experience defending criminal tax cases, we demonstrate that the Second Circuit’s interpretation would criminalize otherwise innocent activity and enable the government to charge a felony in situations where a person’s conduct would otherwise at most constitute a mere misdemeanor, where there is insufficient proof to support a felony tax offense such as tax evasion or filing a fraudulent return, or where criminal charges would otherwise be barred by the statute of limitations.  We conclude by showing the Second Circuit was wrong to conclude that § 7212(a)’s requirement that the defendant acted “corruptly”— in reality a toothless limitation—sufficiently cabins the Omnibus Clause’s scope.

Partner Alexandra A.E. Shapiro and Sean Nuttall authored the brief together with co-counsel from Morvillo Abramowitz Grand Iason & Anello PC.  A copy is available here.