Consider the below fact pattern, and answer the prompt that follows. Fact Pattern Jean Taxpauer was born in France and lived there for most of his life. After obtaining a marketing degree from a university in Paris, Taxpauer got a job at a SwissCo. Although Taxpauer worked in Paris for SwissCo’s Paris office, SwissCo required Taxpauer to open an account with SwissBanc, a Swiss Bank located in Switzerland, and to have his paycheck deposited there. In 2012, Taxpauer immigrated to the United States. There, he began his own consulting company, of which he was the sole owner and employee. Taxpauer provided services to clients both in the United States and overseas. Per Taxpauer’s instructions, his US-based clients made payments to Taxpauer’s bank account in the United States. But Taxpauer directed his foreign clients to make payments to Taxpauer’s overseas account at SwissBanc. From time to time, Taxpauer would transfer money from his overseas SwissBanc account to his domestic American bank account. Taxpauer prepared his own tax returns. From 2012 until 2015, Taxpauer reported 100% of the income he received from his US-based clients (income which, again, was deposited into his domestic account). However, he did not report all of the income that he received from his overseas clients (which, again, was deposited into his SwissBanc account). Rather, he would only report money from his overseas clients when he transferred it from his SwissBanc account to his domestic United States bank account. He would treat that transferred money as income at the time of the transfer for tax purposes. Taxpauer answered “no” on his tax returns when asked if he had a bank account outside of the United States. Taxpauer also did not file Foreign Bank Account Reports (FBARs) for these tax years. Prompts You work for a law office that has asked you to evaluate Taxpauer’s criminal exposure. Draft a memo analyzing this issue. What are the best arguments a prosecutor could make that Taxpauer is criminally culpable? What is Taxpauer’s strongest defense? Are there additional facts you think ought to be developed? Finally, make a judgment call. Which argument is stronger? Why?
