Cheating On Your Taxes Can Get You Kicked Out of the Country. Who Knew?
In a case decided earlier today, the S upreme Court held that a husband and wife who were Japanese citizens but lawful residents of the U.S. could be deported after pleading guilty to filing a false tax return.
Mr. and Mrs. Kawashima, seeking refuge from the repeated Godzilla attacks that plague their homeland, fled Japan and became legal permanent residents of the U.S. in 1984. Ten years later, Mr. Kawashima completed the process of assimilating into our society and becoming a “true” American by egregiously cheating on his taxes. He pled guilty to filing a false return under I.R.C. § 7206(1), while his wife pled guilty to aiding and assisting in the filing of a false return under I.R.C. § 7206(2).
I.R.C. §§ 7206 provides that willfully filing a false tax return is a felony. The issue at hand for the Supreme Court, however, was whether a conviction under these sections constituted an “aggravated felony” under the immigration laws, punishable by deportation.
An aggravated felony is one that either:
Clause #1: Involves fraud or deceit in which the loss to the victim or victims exceeds $10,000; or
Clause #2: Is described in I.R.C. § 7201 (relating to tax evasion) in which the revenue loss to the government exceeds $10,000.
The Kawashimas argued that their conviction for filing a false return failed to meet the standard of an aggravated felony for three reasons:
1. Clause #1 did not apply to their crime, as I.R.C. § 7206 does not contain the words “fraud” or “deceit,”
2. Clause #1 was not intended to cover tax crimes, as that was solely the responsibility of Clause #2, and
3. Since Clause #2 was specific to tax evasion under I.R.C. § 7201, it did not cover their conviction under I.R.C. § 7206.
Inits 6-3 decision, the Supreme Court shot down all three arguments, holding that the Kawashimas’ previousconviction qualified as an aggravated felony under Clause #1, as it involved fraud — even if fraud was not an express requirement of the statute — and the loss to the government exceeded $10,000. So sadly, it’s back to Japan for the Kawashimas.
