North Carolina Man Indicted for Allegedly Filing False Lien

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North Carolina Man Indicted for Allegedly Filing False Lien

The Department of Justice issued a press release regarding the indictment of a North Carolina man alleging the filing of false tax returns and interfering with the administration of the tax laws.  When the Department of Justice prosecutes someone for harassing IRS employees or for making false filings such as lien filings or 1099 filings, it can use 26 U.S.C. Section 7212(a), which is an omnibus statute, rather than a more specific statute.  Section 7212(a) provides for criminal penalty against anyone who “corruptly or by force or threats of force (including any threatening letter or communication) endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title, or in any other way corruptly or by force or threat of force (including any threatening letter or communication) obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title… .”

The DOJ’s policy directive (click here) provides that this section should only be pursued for certain conduct meant to impede investigations or to prosecute someone engaged in large-scale obstructive conduct involving the tax liability of third parties. Otherwise, other sections of the tax code provide more appropriate specific charges for things like tax evasion or filing false returns.

According to the press release, which can be found here:

According to the indictment, between approximately October 2007 through at least September 2011, Billy D. Floyd attempted to obstruct and impede the due administration of the internal revenue laws by filing numerous false Internal Revenue Service (IRS) Forms 1040X, Amended Individual Income Tax Returns, in an attempt to reduce his tax liability to zero.  The indictment further alleges that Floyd submitted fictitious “Surety Bonds” to the IRS that falsely purported to satisfy his outstanding tax liabilities.  Floyd also attempted to disrupt the public sale of property that the IRS previously seized by attempting to intimidate IRS employees conducting the sale as well as potential buyers.  Following the termination of the public sale due to his actions, Floyd also filed a lien against the property in an effort to encumber it and prevent any sale by the IRS.

If convicted, Floyd faces a statutory maximum sentence of three years in prison for each count in the indictment.  He also faces a term of supervised release and monetary penalties.

An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Daniel Layton is an ex-IRS attorney and former Federal prosecutor.  He is the principal of Tax Attorney OC.

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