IRS Can Impose Assessment on Convicted Tax Shelter Fraudster (1)

The IRS can assess and collect civil restitution payments in a parallel proceeding against someone who has been convicted of a federal tax-related crime under Title 18, the Seventh Circuit held Monday in a case of first impression.

The US Court of Appeals for the Seventh Circuit affirmed the US Tax Court’s decision that the IRS could collect $371 million from tax attorney Paul Daugerdas under IRC Section 6201(a)(4)(A) even though the Second Circuit previously upheld a criminal restitution order in that amount.

Daugerdas was convicted in 2013 for designing and marketing tax shelters that generated more than $7 billion ...