Tax Evasion

Suspended Mississippi Supreme Court Justice Oliver Diaz, Jr., who was acquitted on state bribery charges, has been indicted for federal tax evasion.^[1] The indictment was unsealed shortly after the conclusion of the state trial charging Justice Diaz and two former trial judges of accepting bribes from a prominent attorney.^[2]

The federal indictment accuses Justice Diaz and his former wife of filing misleading tax returns by underreporting their income.^[3] These acts could be violations of 26 U.S.C. §§ 7201 and 7206(1).

Section 7201
Under section 7201, it is a felony for a person to willfully attempt to evade or defeat any tax imposed by the Internal Revenue Code, or the payment of that tax.

Violating section 7201 can be punished by a fine of up to $500,000, imprisonment for up to five years, or both, along with paying the costs of prosecution.

Section 7206(1)
Under section 7206(1), it is a felony for a person to willfully make a tax return containing a written declaration, made under the penalty of perjury, that all items on the return are true and correct, which he does not actually believe is true and correct on every material matter.

A violation of section 7206(1) is punishable by a fine of up to $500,000, imprisonment for up to three years, or both, along with paying the costs of prosecution.

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[1] Holbrook Mohr, Miss. Court Justice Faces Indictment, Wash. Post, Aug. 16, 2005, available here.
[2] Id.
[3] Id.