The Two-Way
10:20 am
Mon May 6, 2013

U.S. Courts More Lenient With Offshore Cheats, Analysis Finds

The Wall Street Journal has an interesting bit of analysis today: U.S. courts tend to hand out more lenient punishments to those who hide money offshore to cheat on their taxes than they do to more mundane tax evaders.

The Journal relies on Internal Revenue Service statistics and "data compiled by former U.S. Justice Department lawyer Jack Townsend."

In many offshore shelter cases, the Journal reports, judges have handed out sentences that were shorter than what federal sentencing guidelines provide for.

The Journal adds:

"The average sentence handed down in offshore cases has been less than 15 months, according to Mr. Townsend. In contrast, the average sentence in tax-shelter schemes has been 30 months over the past three fiscal years, according to IRS data.

"Three-quarters of taxpayers charged in offshore account cases have pleaded guilty. So far, judges have handed down prison sentences about half the time.

"'The cases involving offshore bank accounts are drawing lighter sentences than other criminal tax cases,' said Mr. Townsend, who practices at Townsend & Jones LLP in Houston. He calls the discrepancy 'troubling, because cheating is cheating.'"

We'll let you click over to the Journal to read the piece, which includes some interesting, concrete examples.

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