Usually this time of year (i.e., tax time) the Department of Justice indicts a high profile individual for some sort of tax crime. The timing is predicable (they see it as a way to deter tax crimes of the public. See our prior posts regarding some higher profiled individuals here.) However, this year, they snagged a rather surprising individual: U.S. Tax Court Judge Kroupa.
According to the criminal tax indictment filed in court, between 2004 and 2010, Kroupa and her husband purposely understated their taxable income by approximately $1,000,000 and purposely understated the amount of the tax they owed by at least $400,000.
The Tax Crimes charged are:
- Conspiracy to Defraud (Klein Conspiracy) – an Obstruction of Justice Crime,
- Tax Evasion,
- Tax Perjury, and
- Tax Obstruction
You can read about the types of tax crimes as charged here
The conduct alleged is rather disturbing as the indictment asserts that misleading documents were delivered to the IRS in order to convince the IRS employees that certain personal expenses were actually business expenses, and that there was a series of false claims on the tax returns at issue.
Given our large tax litigation practice, we had the opportunity to appear before Judge Kroupa many times. She also authored several important tax opinions, which we believe reached the correct legal position. However, on several occasions she openly admonished our clients for doing exactly what she is accused of in this indictment. On a side note, if I were to defend Judge Kroupa (we are not and have no affiliation with this case), I certainly would not want those comments made on the record read to a jury.