In the typical IRS delinquent tax return examination, the IRS agent will ask that the original delinquent returns be delivered to him or her for filing. Because providing tax returns and other information, such as refund claims, is not considered filing, I will usually file the returns with the IRS Service Center, and provide a copy to the agent with proof of filing. By doing so, I know that a tax return or refund claim has been properly and promptly filed.
The Ninth Circuit Court of Appeals recently ruled in United States v. Boitano that providing original returns to an IRS agent was not a filing for purposes of a criminal charge for filing a false tax return.
Boitano was a partner in an accounting firm whose responsibilities included preparing tax returns and representing clients during audits. However, just like the shoeless children of the cobbler, Mr. Boitano had not filed tax returns for the years 1991-2007. The IRS began an examination of Boitano’s delinquent returns and a Special Enforcement Program Agent had several meetings with Boitano to discuss his failure to file returns. In one of the meetings, Mr. Boitaino handed the agent 2001, 2002 and 2003 tax returns signed under penalties of perjury by Boitano and his wife. The agent stamped the returns as received and returned a stamped copy to Boitano as a receipt.
From there things went from bad to worse for Mr. Boitano. Upon reviewing the returns, the IRS agent noticed that the IRS did not have any record of receiving the estimated tax payments claimed on the returns. Instead of sending the returns to the IRS Service Center for processing, the agent met with Boitano and asked him to explain the discrepancy. When Boitano could not or would not provide an explanation, the agent referred the matter to the IRS Criminal Investigation Division. Boitano was indicted and charged with three counts of making a false statements under IRC Section 7206(1). At trial, Boitano argued that filing is an essential element of Section 7206(1), which says that it is a felony for any person to “willfully make and subscribe any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter” and that his act of handing the returns to the IRS agent did not constitute "filing". The government agreed that a filing is an element of the statute but that argued that the filing element was satisfied when Boitano handed the returns to the agent. The trial court agreed with the government and Boitano was found guilty.
Boitano raised the filing issue on appeal to the Ninth Circuit. The government, in response, changed tactics and agreed that handing the returns to the agent was not a filing. Instead, the government argued that filing was not an essential element of the statute. The Ninth Circuit disagreed with the government and held (1) that a filing is an essential element of the statute and (2) because the government agreed that Boitano had not filed the returns, he could not be found guilty of filing a false tax return.
Although this is a very good result for Mr. Boitano, this is one of the rare cases where the taxpayer benefits from not properly filing a tax return. In addition, the government could have easily charged Mr. Boitano with a crime that did not require filing a tax return, such as tax obstruction, false statement, tax evasion or failure to file.