Block on Trump's Asylum Ban Upheld by Supreme Court
John Larson did the time, but he apparently can't pay the fine.
And who could? It's a $61,534,027 tax penalty, but who's counting in Larson v. United States of America?
The U.S Second Circuit Court of Appeals counted, but it doesn't really care. The appeals court dismissed his challenge to the penalty, saying it didn't have jurisdiction.
No Day in Court
Larson was convicted and served time for tax evasion after creating tax shelters for high-wealth individuals. Forbes called him a "tax shelter guru" for sheltering assets in the "$16 billion neighborhood."
But that's not important right now because Larson is out of jail and his civil case is about his personal tax liability. After all was said and done, the IRS said he owed $160,232,026 for failing to register tax shelters.
He filed an appeal with the IRS Office of Appeals, which reduced the penalty to $67,661,349, but still. He made a few payments, bringing it down to about $61 million, then sued for judicial review.
A trial judge dismissed for lack of jurisdiction and failure to state a claim, saying Larson had to pay the full penalty and then sue for a refund. The Second Circuit affirmed.
The appeals panel expressed some concern about the results, but said its hands were tied. It's up to Congress to change the tax penalty procedure.
Jack Townsend, who blogs on Federal Tax Crimes, said the appeals court gave the issue a "short shrift."
"The holding is that the IRS can make an arbitrary and punitive assessment for a tax or penalty which does not permit the Tax Court prepayment remedy (or have one of the statutory partial payment relief provisions) and thereby preclude a taxpayer from litigating the merits," he said.
In other words, who could pay a $61,534,027 penalty before challenging it in court? (By the way, Forbes said the penalty accounting was off by $56.)