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July 17, 2015

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Catch-all clause for criminal charges: what is the omnibus clause?

The federal tax code is voluminous. There are seemingly innumerable, highly detailed sections that taxpayers and tax professionals can run afoul of.

The Foreign Account Tax Compliance Act (FATCA) and other recent laws have only added to the sprawling complexity of the tax code and the burden of complying with it.

But in the context of criminal tax charges, there are also certain sections of the code that are exceedingly broad. One of those is the so-called omnibus clause, which we will discuss in this post.

The statutory reference for the omnibus clause is Title 26, Section 7212(A) of the U.S. Code. The clause makes it a criminal offense to corruptly endeavor to obstruct the administration of tax laws.

In essence, this open-ended language gives prosecutors another tool to use when seeking to bring criminal tax charges. Tax fraud and tax evasion are already rather broadly worded offenses in the tax code. But the omnibus clause serves as a catch-all that can try to sweep in even more acts or omissions.

This can be used not only against taxpayers, but also against accountants or other tax professionals who have been become suspects in an IRS investigation of their clients. The government may assert that a professional impeded or obstructed an investigation in an unlawful (“corrupt”) way.

As with any charge, it is important to push back by taking the right strategic steps when up against the omnibus clause. The first of those steps should be to contact an attorney who is experienced in dealing with the IRS and skilled in defending against criminal tax charges.

Tax Crimes