Two days ago, I posted on perhaps the top tax story at least on this news cycle: ProPublica Publishes Series Based on IRS Data Trove Produced by Anonymous Source (Federal Tax Crimes Blog 6/8/21), here. In the posting, I focused on the legality of the disclosure of the IRS information, known as return information, about the identified taxpayers. Section 7213, here, makes it a felony crime for IRS personnel to disclosethe return information and for nongovernment persons receiving and disclosing (publishing) the information. ProPublica seems within the scope of § 7213(a)(3).
As I noted in the blog, ProPublica stated that it was aware of the law and justified its disclosure as follows:
There is also a legal question here, and we want you to know we have taken it seriously. A federal law ostensibly makes it a criminal offense to disclose tax return information. But we do not believe that law would be constitutional if applied to bar or sanction publication of a story in the public interest when the news organization did not itself remove the information from the control of the IRS or solicit anyone else to do so — as we did not. And this is not our first experience with this law.
In 2012, someone at the IRS (we don’t know who or why; they used a plain brown IRS envelope) sent ProPublica copies of tax filings seeking exemption for a number of political committees, including Republican political guru Karl Rove’s Crossroads GPS. The filings were not yet supposed to be public, and the IRS indicated that it would consider our publication of them to be criminal. We explained our view of the constitutionality of that statute as applied in such circumstances and published our story, which raised concerns about whether Rove’s group had been forthcoming with the agency. We never heard about the matter from the IRS again.
I offer today questions for Tax Crimes professionals and students to test a basic federal tax crimes concept. Section 7213(a)(3), like the earlier provisions in § 7213(a) requires that the person “willfully” disclose the return information. Indeed, most of the tax crimes in the IRC (Title 26) require the person act willfully. Willfully requires “‘a voluntary, intentional violation of a known legal duty.'” Cheek v. United States, 498 U.S. 192, 200 (1991), here.
Some have said that ignorance of the law is generally no defense, but, for tax crimes with a willfully requirement, ignorance of the law is a defense. The reason is that, to secure conviction, the Government must prove that the defendant knew the law and intended to violate it. There is considerable nuance in that general statement, but the general statement should be sufficient for present purposes.
I ask readers to test ProPublica’s explanation quoted above to see what type of defense ProPublica may have if the Government prosecutes under § 7213(a)(3) or some derivative criminal statute such as an offense conspiracy under 18 USC § 371. For this purpose, the reference to ProPublica includes the individuals connected with ProPublica participating in the publication. Consider these questions accepting ProPublica’s statement as given.
1. Does ProPublica have a Cheek defense? If so, how and when can it be asserted? Specifically, in a criminal case tried to a jury, does the judge or the jury decide the issue.
2. Is there a valid constitutional defense to willfulness, such as a sincerely held belief that the § 7213(a)(3) is unconstitutional as applied to the media on important public issues? If so, when and how is that claim asserted. Is that an argument made only to the judge or is it one the jury may consider in assessing whether ProPublica acted willfully in the meaning of the statute?
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