Alabama Salesman Pleads Guilty to Tax Evasion

The United States Department of Justice released issued a press release regarding an Alabama salesman and tax defier pleading guilty to tax evasion. The individual in question, Ivan Scott Butler, worked as an automobile industry consultant and sold automobile warranties on the side as an independent salesman.

Per the press release:

In 1993, Butler stopped filing tax returns and attended tax defier meetings and purchased tax defier materials. Starting in 1998, Butler used several Nevada nominee corporations to receive his income. In around 1999, Butler moved hundreds of thousands of dollars, some in precious metals, to bank accounts in Switzerland and concealed his assets in offshore insurance policies held in the name of non-U.S. insurance providers, disguising his ownership of the funds. Such accounts, which generally are used as investment vehicles, are commonly known as “insurance wrappers.”

In 2014, Butler converted some of his insurance annuities into precious metals, which were shipped to Butler and another individual in the United States. Some of those precious metals were given to friends and family for safekeeping. In total, Butler caused a tax loss to the Internal Revenue Service (IRS) of $1,093,400.

Per the Tax Division’s Manual, tax evasion is charged under 26 U.S.C. § 7201. The elements for a charge are listed below:

1.  An affirmative act constituting an attempt to evade or defeat a tax or the payment thereof. Sansone v. United States, 380 U.S. 343, 351 (1965); Spies v. United States, 317 U.S. 492, 497-99 (1943).
2. An additional tax due and owing. Boulware v. United States, 552 U.S. 421, 424 (2008); Sansone v. United States, 380 U.S. 343, 351 (1965); Lawn v. United States, 355 U.S. 339, 361 (1958).
3. Willfulness. Cheek v. United States, 498 U.S. 192, 193 (1991); United States v. Pomponio, 429 U.S. 10, 12 (1976); United States v. Bishop, 412 U.S. 346, 358-59 (1973); Sansone v. United States, 380 U.S. 343, 351 (1965); Holland v. United States, 348 U.S. 121, 124, 139 (1954).

U.S.S.G. 2T4.1, the “Tax Table” provides that tax loss of $1,093,400, before considering other relevant factors or characteristics, falls under Offense Level 20 because it is higher than $550,000 but not higher than $1,500,000. Without a prior criminal history (Criminal History Category 1), the Sentencing Table in the United States Sentencing Guidelines provides for a sentence range between 33 and 41 months for Offense Level 20.

The sentence is scheduled for June 24, 2020 with U.S. District Judge Annemarie Carney Axon.

All persons who are merely charged with crimes are presumed innocent until proven guilty. Furthermore, sentences can vary depending on several factors which vary from person to person. This blog post does not implicitly or explicitly suggest there is basis to the prosecuting agency’s allegations or take any position on the strengths or weaknesses of the government’s positions. Posted on 03/11/2020 by Benjamin Tu