Marinello v. United States (16-1144)
argument 16-1144Marinello v. United States
Supreme Court of the United States
1h 0m
6 speakers
8 chapters
transcribed 6 days ago
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What is the Court’s interpretation of Congress’s intent behind the tax obstruction statute?
We'll hear argument next in Case 16-1144,
Marianello v. United States. Mr. Hellman. Thank you, Mr. Chief Justice, and may it please the Court. When Congress made it a felony to obstruct the due administration of the tax code, it was not creating an all-purpose tax crime. It was borrowing from a statute that prohibited the obstruction of a pending proceeding. This Court normally presumes that borrowed language carries its meaning with it, and that has to be the case here, for without that limitation, the Obstruction would swallow up the other crimes that Congress simultaneously enacted, and in particular, it would obliterate the careful line that Congress drew between misdemeanors and felonies. Indeed, the government's interpretation is so broad that it would show entirely legitimate conduct that Congress never intended to
penalize. What lawful conduct would the government's reading put at risk?
Certainly. There's a whole range because obstruction on their definition is so broad. For example, you could imagine a situation, I'll take an everyday taxpayer, someone who pays their gardener, say, in cash, which is one of the predicate acts in this case as well. Paying in cash isn't necessarily... illegal under the tax laws. But the test that the government would have is, by paying someone in cash, you're making it harder for the IRS to assess perhaps your tax liability or perhaps the tax liability of the person that you are paying. And at that point, the only question that remains is mens rea. Why did you do it? Did you do it for the purpose of obtaining an unlawful benefit? And that benefit need not even be your own under the government's reading.
It could be the benefit of the gardener. Or to take another example, imagine a taxpayer who says, I'm going to keep every document the law requires under the code. I'll keep every document but no documents more. If the IRS ever came back and looked at that person's tax position, they might say, your failure to keep these documents that aren't otherwise required hindered us in our ability to assess your taxes. At that point, again, the only question becomes the why, the mens rea. And with a felony prosecution on the line, and with so many acts, the actus reus is being so broad, anything that hinders the IRS's ability to carry out a
code of instruction. My problem is that I have a second question. Sure. I have a lot of hypotheticals under your definition of what this section means. That wouldn't be covered. So how about if an individual knows that the IRS is in the process of assessing his taxes and he in some way obstructs that process? Or an agent, the agent in 2004, called the defendant and said, you know, I'm deciding whether to open an investigation. I haven't, but I'm just thinking about it. I understand you have this business and I don't see any tax returns. And your client answered the way he first did. I make less than $1,000. I don't have to file. And the agent closes the file and says, I'm not going to investigate this. Under your theory, that direct obstruction would not be actionable.
It would be Several other crimes, as you describe it, it sounds like tax evasion if there's a deficiency and an evasive act in connection with it. It could be a false statement to the IRS. But Congress knows how to write a pending proceeding requirement. If you think back to the statute at issue in Arthur Anderson, Section 1512, another obstruction statute that applies in cases of corruption to proceedings, the 1512F, which Congress enacted as part of Sarbanes-Oxley, says, The proceeding need not be pending or even about to be instituted. Now, this Court —
But wait a minute. Yes, it can do that sometimes. It can do that. It doesn't other times.
It doesn't other times. And — So is
this one of those other times?
Well, I think the right way to understand it is Congress, the need not be pending language, was a product of a 1980s revision to the statute and really started to apply to documents in Sarbanes-Oxford.
Do you think the word administration, due administration of this title, does any work in the interpretation?
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Chapters
8 chapters
1
What is the Court’s interpretation of Congress’s intent behind the tax obstruction statute?
0:00–7:53
2
How does the government’s broad reading of the statute affect lawful conduct like cash payments to a gardener?
7:53–14:42
3
What role does mens rea (specific intent) play in determining liability under the obstruction provision?
14:42–22:36
4
How do record‑keeping failures and document withholding relate to the statute’s “obstruction” language?
22:36–28:33
5
When does the doctrine of lenity apply to ambiguous criminal tax statutes?
28:33–34:55
6
What historical statutes (e.g., §1503, §1512) inform the modern reading of the “due administration” clause?
34:55–42:32
7
How does the Department of Justice decide whether to charge the maximum felony under §7212 versus lesser offenses?
42:32–52:03
8
What limiting constructions could the Court adopt to prevent over‑criminalization of routine tax conduct?
52:03–1:00:51