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25.1.9.5
(01-01-2003)
Criminal Provisions
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IRC 7206(1) (Declarations under penalties of perjury)
is the criminal provision most useful to TEGE.
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IRC 7206(1) applies to tax returns as well as other
documents. See US v Holroyd, 732 F.2d 1122 for a discussion of application
of IRC 7206(1) when the taxpayer filed a false statement as opposed to a false
return. A prima facie violation of IRC 7206(1) can be
proven in the absence of a provable tax deficiency.
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Applications for qualification of employee plans
and exempt organizations, and information returns and reports are subscribed
under the penalty of perjury.
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For example, filing a determination letter application
containing false statements or submitting falsified documents in support of
such an application or submitting a falsified annual return for an employee
plan (or exempt organization) would give rise to a potential IRC 7206(1) prosecution
if the falsifications are shown to be willful and material.
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Under IRC 7201, filing a false determination letter
application, annual return or registration statement can also be an act leading
to tax evasion.
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Under IRC 7203, failure to file any required return/statement
dealing with an employee plan may be subject to criminal penalties in addition
to civil penalties.
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Many return/reports are prepared by third parties.
Under IRC 7206(2), preparers of false pension plan documents can be prosecuted.
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