Tax Law

Filing Error Costs Gov't $100 M Tax Bill

Oops. After winning a tax evasion case against a man described as the biggest tax evader in U.S. history, federal prosecutors made a mistake.

They cited the wrong statutory language in a written plea agreement with telecommunications entrepreneur Walter Anderson, reports AP. And that means the government can’t recover some $100 to $175 million that he owes in unpaid taxes and penalties, ruled U.S. District Judge Paul L. Friedman on Friday, denying a motion for reconsideration of his original March decision.

Unfortunately, prosecutors also didn’t include in the agreement standard probation language. And that means, the judge says, that he can’t require Anderson to repay the money as part of his probation either, after he serves a nine-year prison sentence.

All of the money, however, may not be lost. The government still has another game plan that might succeed – the Internal Revenue Service reportedly plans to file civil litigation to attempt to collect some of the funds it believes Anderson has stashed in various accounts throughout the world. (He says he doesn’t.) But that is going to require a whole new court proceding. And, even if the IRS wins, a civil court doesn’t have as many enforcement powers as a criminal court.

We welcome your comments, but please adhere to our comment policy and the ABA Code of Conduct.

Commenting is not available in this channel entry.