This week the Supreme Court held that, to establish a violation of the IRS’s obstruction provision, 26 U.S.C. § 7212(a), the government must prove that the defendant was aware of a pending, “targeted governmental tax-related proceedings, such as a particular investigation or audit.” Sentencing Resource Counsel Sissy Phleger has the details:
In Marinello v. United States, the Supreme Court narrowly construed the obstruction provision in the Internal Revenue Code, 26 U.S.C. § 7212(a), known as the Omnibus Clause. That provision criminalizes “corruptly or by force or threats of force . . . obstruct[ing] or imped[ing], or endeavor[ing] to obstruct or impede, the due administration of [the Internal Revenue Code].” Justice Breyer wrote the opinion, joined by Roberts, Kennedy, Ginsburg, Sotomayor, Kagan, and Gorsuch. Thomas dissented, joined by Alito.
Relying on prior precedents interpreting other obstruction provisions, the Court narrowly construed the provision to require: first, that there be “a ‘nexus’ between the defendant’s conduct and a particular administrative proceeding,” and second, that a proceeding was pending or reasonably foreseeable by the defendant at the time of the conduct. The Court carefully cabined “administrative proceeding” to mean “targeted administrative action”—like an investigation or an audit—and not simply “routine, day to-day work carried out in the ordinary course by the IRS, such as the review of tax returns.” (emphasis added).
The Court adopted the reasoning of its prior ruling in United States v. Aguilar, 515 U.S. 593 (1995), interpreting 18 U.S.C. § 1503(a). As in Aguilar, the Court grounded its “interpretive restraint” in two factors—its view that Congress did not/could not have intended the broad scope of the alternative, and its concern over “the lack of fair warning and related kinds of unfairness.” The Court was particularly concerned with the overlap between a broadly-interpreted Omnibus Clause (a felony), and other (misdemeanor) tax offenses—worrying that redundant provisions could erode fair warning, and exacerbate plea gamesmanship.
Justices Thomas and Alito dissented, finding that the majority’s limitation on the provision’s scope was not grounded in the text, and was instead the Court substituting its own judgment for that of Congress.