The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
From yesterday's Marinello v. U.S.:
[T]o rely upon prosecutorial discretion to narrow the otherwise wide-ranging scope of a criminal statute's highly abstract general statutory language places great power in the hands of the prosecutor. Doing so risks allowing "policemen, prosecutors, and juries to pursue their personal predilections," which could result in the nonuniform execution of that power across time and geographic location. And insofar as the public fears arbitrary prosecution, it risks undermining necessary confidence in the criminal justice system. That is one reason why we have said that we "cannot construe a criminal statute on the assumption that the Government will 'use it responsibly.' "
The background: Federal law makes it a crime to "corruptly … obstruct or impede, the due administration" of the Internal Revenue Code. The question before the court is whether this criminalized all actions that deliberately, and with a desire for illegal gain for someone (which is how "corruptly" has been read), make it harder for the government to assess and collect lawfully owed taxes, or was instead limited to attempts to obstruct a specific investigation (e.g., a pending audit). The defendant in this case was cheating on his taxes, but prosecuting him for that was made harder by his deliberately running an all-cash business and constantly shredding financial records; the court concluded that such practices were not themselves criminal under the statute.
Here's part of the Court's concern (in a seven-Justice opinion written by Justice Breyer):
A broad interpretation would also risk … lack of fair warning and related kinds of unfairness …. Interpreted broadly, the provision could apply to a person who pays a babysitter $41 per week in cash without withholding taxes, leaves a large cash tip in a restaurant, fails to keep donation receipts from every charity to which he or she contributes, or fails to provide every record to an accountant. Such an individual may sometimes believe that, in doing so, he is running the risk of having violated an IRS rule, but we sincerely doubt he would believe he is facing a potential felony prosecution for tax obstruction. Had Congress intended that outcome, it would have spoken with more clarity than it did in [the obstruction statute].
Justice Thomas, joined by Justice Alito, dissented, and responded to the above passages this way:
To be sure, [the law] is a sweeping obstruction statute. Congress may well have concluded that a broad statute was warranted because "our tax structure is based on a system of self-reporting" and "the Government depends upon the good faith and integrity of each potential taxpayer to disclose honestly all information relevant to tax liability." …
The Court frets that the Omnibus Clause might apply to "a person who pays a babysitter $41 per week in cash without withholding taxes," "leaves a large cash tip in a restaurant," "fails to keep donation receipts from every charity," or "fails to provide every record to an accountant." Whether the Omnibus Clause would cover these hypotheticals—and whether the Government would waste its resources identifying and prosecuting them—is debatable. But what should not be debatable is that the statute covers Marinello, who systematically shredded documents and hid evidence about his company's earnings to avoid paying taxes even after warnings from his lawyer and accountant. It is not hard to find similar cases prosecuted under the Omnibus Clause. .
The Court, in its effort to exclude hypotheticals, has constructed an opening in the Omnibus Clause large enough that even the worst offenders can escape liability. In doing so, it failed to heed what this Court recognized in a similar case: "[T]he authority vested in tax collectors may be abused, as all power is subject to abuse. However, the solution is not to restrict that authority so as to undermine the efficacy of the federal tax system."