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Will Enron CFO Supreme Court case affect tax crime law?

October 14, 2009

Tax fraud isn't supposed to happen accidently, explains attorney Jack Townsend:

Since the tax law requires willfulness, defined as the intentional violation of a known legal duty, then the legal standard must be knowable so that the defendant -- any defendant, even the hypothetical reasonable defendant -- charged with the crime must be able to ascertain the legal standard in order to intend to violate the standard.

Is it fair to apply this sort of standard to fuzzy concepts like economic substance? When the tax law is obscure and uncertain, where do you draw the line between "non-deductible" and "illegal" in a tax shelter?

These questions might get addressed when the Supreme Court takes up the criminal conviction of Enron executive Jeff Skilling for failure to provide "honest service" at Enron, as Mr. Townsend discussed in his Federal Tax Crimes blog.

Update, 10/15/2009: More here.