A dumb question....Maybe ???

[xanadu]

If a person is convicted of tax evasion, and serves prison time for that crime.
Does time served cancel the tax debt that he did not pay?

[wserra]

No. Moreover, getting straight with the govt will be a condition of supervised release - meaning that he can be sent back to prison for failing to make his best efforts to do so.

[webhick]

The thing to keep in mind is that they're doing time for the crime, not the debt. If doing the time for the crime paid off the debt then logic would dictate that you could get out of the time by paying the debt.

[grixit]

If a person is convicted of tax evasion, and serves prison time for that crime.
Does time served cancel the tax debt that he did not pay?

No, because the US does not have debtor's prisons. No one goes to jail for owing, they go for not paying. That's a significant difference. Jail is the punishment for that failure, repayment is still required.

[Gregg]

There are no dumb questions. Only dumb answers.

And for the dumb answers, may I suggest http://www.losthorizons.com/phpBB/viewforum.php?f=2

[JamesVincent]

There are no dumb questions. Only dumb answers.

There is only one dumb question, the one unasked.

[LPC]

No one goes to jail for owing, they go for not paying.

For *willfully* not paying.

If you do something to actually hide assets, then it becomes evasion of payment, which is a more serious crime.

Prosecutions for willful failure to pay seem to be rare. I've only seen or heard of one case, and that was Webster Hubbell, a friend of Bill Clinton's who was prosecuted by Ken Starr. (Some of the convictions were later reversed by the Supreme Court, and I don't know if the willful failure to pay charges were among them.)

[jcolvin2]

No one goes to jail for owing, they go for not paying.

For *willfully* not paying.

If you do something to actually hide assets, then it becomes evasion of payment, which is a more serious crime.

Prosecutions for willful failure to pay seem to be rare. I've only seen or heard of one case, and that was Webster Hubbell, a friend of Bill Clinton's who was prosecuted by Ken Starr. (Some of the convictions were later reversed by the Supreme Court, and I don't know if the willful failure to pay charges were among them.)

There appears to be a reasonable volume of evasion of payment (as opposed to evasion of assessment) cases, as least when judged by the number of appellate cases. From the DOJ Tax Criminal Tax Manual:

http://www.justice.gov/tax/readingroom/ ... htm#TOC2_2

8.06[2] Attempt To Evade Payment

The affirmative acts of evasion associated with evasion of payment cases almost always involve some form of concealment of the taxpayer’s ability to pay the tax due and owing or the removal of assets from the reach of the IRS. Obstinately refusing to pay taxes due and possession of the funds needed to pay the taxes, without more, does not establish the requisite affirmative act necessary for an attempted evasion of payment charge. See Spies, 317 U.S. at 499.

Examples of affirmative acts of evasion of payment include placing assets in the names of others, dealing in currency, causing receipts to be paid through and in the name of others, causing debts to be paid through and in the name of others, and paying creditors instead of the government. See Cohen v. United States, 297 F.2d 760, 762, 770 (9th Cir. 1962); see also United States v. Carlson, 235 F.3d 466, 469 (9th Cir. 2000) (opening and using bank accounts with false social security numbers, incorrect places of birth, and incorrect dates of birth could easily have misled or concealed information from the IRS); United States v. Gonzalez, 58 F.3d 506, 509 (10th Cir. 1995) (signing and submitting false financial statements to the IRS); United States v. Pollen, 978 F.2d 78, 88 (3d Cir. 1992); (defendant placed assets out of the reach of the United States Government by maintaining more than $350,000.00 in gold bars and coins, platinum, jewelry, and gems in safety deposit boxes at bank, in a fictitious name); United States v. Beall, 970 F.2d 343, 345-47 (7th Cir. 1992) (defendant instructed employer to pay income to a tax protest organization); United States v. McGill, 964 F.2d 222, 227-29, 232-33 (3d Cir. 1992) (defendant concealed assets by using bank accounts in names of family members and co-workers); United States v. Brimberry, 961 F.2d 1286, 1291 (7th Cir. 1992) (defendant falsely told IRS agent that she did not own real estate and that she had no other assets with which to pay tax); United States v. Daniel, 956 F.2d 540, 542-43 (6th Cir. 1992) (defendant used other persons’ credit cards, used cash extensively, placed assets in other persons’ names); United States v. Conley, 826 F.2d 551, 553 (7th Cir. 1987) (defendant concealed “nature, extent, and ownership of his assets by placing his assets, funds, and other property in the names of others and by transacting his personal business in cash to avoid creating a financial record”); United States v. Shorter, 809 F.2d 54, 57 (D.C. Cir. 1987) (defendant maintained a “cash lifestyle” in which he “conducted all of his professional and personal business in cash,” possessed no credit cards, never acquired attachable assets, and maintained “no bank accounts, office ledgers, or receipts or disbursement journals”), abrogated on other grounds by Daubert v. Merrell Dow Pharmaceuticals, Inc. 509 U.S. 579, 597-98 (1993); United States v. Hook, 781 F.2d 1166, 1168-69 (6th Cir. 1986) (defendant did not file a false return or fail to file, but concealed assets); United States v. Voorhies, 658 F.2d 710, 712 (9th Cir. 1981) (defendant removed money from the United States and laundered it through Swiss banks); but see McGill, 964 F.2d at 233 (mere failure to report the opening of an account in one’s own name and in one’s own locale is not an affirmative act).


JC Note: A person sentenced to prison for tax evasion may have his or her term of supervised release (a period of one to five years after the jail sentence is over) revoked (and be sent back to jail) if they do not comply with the terms of their supervised release, which ordinarily include settling up with the IRS. This procedure requires significantly less in the way of formalities than bringing a whole new tax evasion charge. It is thus somewhat rare to see a prosecution for evasion of assessment or tax perjury followed up by a evasion of payment case, though I have seen it a couple of times.