In United States v. Christensen, 2021 U.S. Dist. LEXIS 9306
(D. Ariz 2021), TN here and CL here, Christensen had been convicted on 9 tax
counts (evasion for 7 years and failure to file for 2) but acquitted on 5
counts of tax perjury. The court ordered
$1,603,533 restitution. Christensen
appealed and the convictions were affirmed.
Christensen subsequently filed
to vacate his conviction under 28 U.S.C. § 2255, alleging ineffective assistance
of counsel. The district court denied
the petition and request for certificate of appealability. The Ninth Circuit denied Christensen’s
request for a certificate of appealability. During the post-trial proceedings (appeal and §
2255 proceeding), Christensen did not contest the amount of the
After completing his period of incarceration, the Government
sought to collect the restitution through writs of garnishment permitted to collect restitution. (For some reason, the restitution apparently had not
been assessed under § 6201; in any event, the Government acted under the garnishment collection procedures rather than the tax assessment collection procedures)
Christensen filed a writ for error coram nobis arguing attacking
The Court first held that the writ of coram nobis was an appropriate
remedy for Christensen. The writ of
coram nobis is rarely used, so I will not go into the details for the Court’s
holding that it was an appropriate remedy.
(For procedure enthusiasts, the holding is interesting because FRCP 60(e) by its text abolishes the writ, but courts have held that the writ survives under the
All Writs Act (28 U.S.C. § 1651(a)) for some purposes; those enthusiasts should review
The Court then rejected Christensen’s broadside argument
against the government’s attempt to collect by garnishment based on restitution
rather than on assessment of the tax. Of
course, the Government can collect restitution under general collection tools
available for restitution. The
additional tool in § 6201(a)(4) permitting assessment of tax restitution (with
resulting IRS collection tools) is not required for the use of the general
restitution collection tools. The Court
also rejected certain related arguments.
The Court then turned to Christensen’s good argument — called the “successful Argument — related
to restitution. (Slip Op. 13-15.) In the original
restitution order, the Court quantified the restitution based on the tax
loss. The problem is that the tax loss
can properly include loss for years other than the years of conviction whereas
restitution can include loss only for the years of conviction. The Court accordingly reduced the restitution
amount to $579,706 from the original amount of $1,603,533. The Court also added to that amount prejudgment
interest of $202,816.19, thus raising total restitution to $782,522.19.
On making the critical distinction between tax loss and restitution, see On Restitution, Count of Conviction and Tax Loss (Federal Tax Crimes Blog 10/24/13), here.
Of course, the IRS can still assess tax, penalty (probably civil
fraud) and interest for the years other than the years of conviction if the IRS can prove fraud for those years by clear and convincing evidence. To do that, the IRS will have to jump through the required
hoops (notice of deficiency, etc.). Whether the IRS wants to jump through those hoops with the amount of restitution it has sustained of course depends upon Christensen’s financial condition and future prospects.