Olson

Question 1

Answer 1

Question 2

Answer 2

Question 3

1341(h)
Any person who — defined in — shall be —

Answer 3

Question 4

1341(B)(i)

mens rea

To - 2 terms - the - 5 terms - of -

Answer 4

Question 5

1341(a)(i) and
Mens rea
Property involved in — represents - ACTUS REUS— in fact involves

A(1)
Intends

Answer 5

Question 6

Answer 6

Question 7

Answer 7

Question 8

1957(a)
Mens rea - 2 terms - in a - in - of a value - derived from

Answer 8

Question 9

18 usc 1957 definitions

3 terms

1. Affecting - but excluding
3. Same as

Answer 9

Question 10

18 usc 1957 punishment

Answer 10

Question 11

18 usc 1957(b)(2) alt fine

Answer 11

Question 12

18 usc 1957(c)

Answer 12

Question 13

Broad actus reus

Answer 13

Question 14

Answer 14

Question 15

CFIUS DECLARATIONS

Answer 15

Question 16

CFIUS decs mandatory when

Answer 16

I

Question 17

CFIUS FINDINGS

Action under section -

Options under negative finding

Answer 17

Question 18

Basis of committee decisions

Answer 18

Question 19

CFIUS Three risk assessment factors

Answer 19

Question 20

4 Prominent companies public through spac

Answer 20

Question 21

Real world spac example

Answer 21

Question 22

Scam spac issues

Answer 22

Question 23

SPAC Subpar issues

Answer 23

Question 24

SPAC risks

Answer 24

Question 25

SPAC advantages

Answer 25

Question 26

spac time limits

Answer 26

Question 27

SPAC TAKEAWAYS

Answer 27

Question 28

Wf elements

Answer 28

Question 29

Unit trusts

Answer 29

Question 30

1961(7) Title
term defined and
B i in short
ii 5 items
iii crime against…
iv 2 items
C
D
E
F
G

Answer 30

Definitions

(7) the term “specified unlawful activity” means— (A) any act or activity constituting an offense listed in section 1961(1) of this title except an act which is indictable under subchapter II of chapter 53 of title 31;

B) with respect to a financial transaction occurring in whole or in part in the United States, an offense against a foreign nation involving— (i) the manufacture, importation, sale, or distribution of a controlled substance (as such term is defined for the purposes of the Controlled Substances Act); (ii) murder, kidnapping, robbery, extortion, destruction of property by means of explosive or fire, or a crime of violence (as defined in section 16 ); (iii) fraud, or any scheme or attempt to defraud, by or against a foreign bank (as defined in paragraph 7 of section 1(b) of the International Banking Act of 1978)); (iv) bribery of a public official, or the misappropriation, theft, or embezzlement of public funds by or for the benefit of a public official; (v) smuggling or export control violations involving— (I) an item controlled on the United States Munitions List established under section 38 of the Arms Export Control Act ( 22 U.S.C. 2778 ); or (II) an item controlled under regulations under the Export Administration Regulations ( 15 C.F.R. Parts 730 – 774 ); (vi) an offense with respect to which the United States would be obligated by a multilateral treaty, either to extradite the alleged offender or to submit the case for prosecution, if the offender were found within the territory of the United States; or (vii) trafficking in persons, selling or buying of children, sexual exploitation of children, or transporting, recruiting or harboring a person, including a child, for commercial sex acts;

C) any act or acts constituting a continuing criminal enterprise, as that term is defined in section 408 of the Controlled Substances Act ( 21 U.S.C. 848 ); (

D) an offense under section 32 (relating to the destruction of aircraft), section 37 (relating to violence at international airports), section 115 (relating to influencing, impeding, or retaliating against a Federal official by threatening or injuring a family member), section 152 (relating to concealment of assets; false oaths and claims; bribery), section 175c (relating to the variola virus), section 215 (relating to commissions or gifts for procuring loans), section 351 (relating to congressional or Cabinet officer assassination), any of sections 500 through 503 (relating to certain counterfeiting offenses), section 513 (relating to securities of States and private entities), section 541 (relating to goods falsely classified), section 542 (relating to entry of goods by means of false statements), section 545 (relating to smuggling goods into the United States), section 549 (relating to removing goods from Customs custody), section 554 (relating to smuggling goods from the United States), section 555 (relating to border tunnels), section 641 (relating to public money, property, or records), section 656 (relating to theft, embezzlement, or misapplication by bank officer or employee), section 657 (relating to lending, credit, and insurance institutions), section 658 (relating to property mortgaged or pledged to farm credit agencies), section 666 (relating to theft or bribery concerning programs receiving Federal funds), section 793, 794, or 798 (relating to espionage), section 831 (relating to prohibited transactions involving nuclear materials), section 844(f) or (i) (relating to destruction by explosives or fire of Government property or property affecting interstate or foreign commerce), section 875 (relating to interstate communications), section 922(l) (relating to the unlawful importation of firearms), section 924(n), 932, or 933 (relating to firearms trafficking), section 956 (relating to conspiracy to kill, kidnap, maim, or injure certain property in a foreign country), section 1005 (relating to fraudulent bank entries), 1006 (relating to fraudulent Federal credit institution entries), 1007 section 46502 of title 49 , United States Code, a felony violation of the Chemical Diversion and Trafficking Act of 1988 (relating to precursor and essential chemicals), section 590 of the Tariff Act of 1930 ( 19 U.S.C. 1590 ) (relating to aviation smuggling), section 422 of the Controlled Substances Act (relating to transportation of drug paraphernalia), section 38(c) (relating to criminal violations) of the Arms Export Control Act, section 11 (relating to violations) of the Export Administration Act of 1979, section 206 (relating to penalties) of the International Emergency Economic Powers Act, section 16 (relating to offenses and punishment) of the Trading with the Enemy Act, any felony violation of section 15 of the Food and Nutrition Act of 2008 (relating to supplemental nutrition assistance program benefits fraud) involving a quantity of benefits having a value of not less than $5,000, any violation of section 543(a)(1) of the Housing Act of 1949 (relating to equity skimming), any felony violation of the Foreign Agents Registration Act of 1938, any felony violation of the Foreign Corrupt Practices Act, section 92 of the Atomic Energy Act of 1954 ( 42 U.S.C. 2122 ) (relating to prohibitions governing atomic weapons), or section 104(a) of the North Korea Sanctions Enforcement Act of 2016 environmental crimes (

E) a felony violation of the Federal Water Pollution Control Act ( 33 U.S.C. 1251 et seq.), the Ocean Dumping Act ( 33 U.S.C. 1401 et seq.), the Act to Prevent Pollution from Ships ( 33 U.S.C. 1901 et seq.), the Safe Drinking Water Act ( 42 U.S.C. 300f et seq.), or the Resources Conservation and Recovery Act ( 42 U.S.C. 6901 et seq.); (

F) any act or activity constituting an offense involving a Federal health care offense; or

(G) any act that is a criminal violation of subparagraph (A), (B), (C), (D), (E), or (F) of paragraph (1) of section 9(a) of the Endangered Species Act of 1973 ( 16 U.S.C. 1538(a)(1) ), section 2203 of the African Elephant Conservation Act ( 16 U.S.C. 4223 ), or section 7(a) of the Rhinoceros and Tiger Conservation Act of 1994 ( 16 U.S.C. 5305a(a) ), if the endangered or threatened species of fish or wildlife, products, items, or substances involved in the violation and relevant conduct, as applicable, have a total value of more than $10,000;

Question 31

18 usc 1956 title and 3
A
B 5 items
C

Answer 31

Laundering of monetary instruments

Question 32

18 usc 1956
actus reus
Penalty

Answer 32

Question 33

18 usc 1956 b penalties
1957 title

Answer 33

Engaging in monetary transactions in property derived from specified unlawful activity

Question 34

1341 title
Actus reus
Bad consequence x 3

Answer 34

Frauds and swindles

Bad consequence x 3: defraud, obtain money by false p, counterfeit instruments

Question 35

1341 actus reus two methods

Answer 35

Question 36

1341 penalty

Answer 36

Question 37

1346 definition

Answer 37

Question 38

1343 mens rea

Answer 38

Question 39

1343 actus reus

Answer 39

Question 40

1343 penalty

Answer 40

Question 41

EEZ

Answer 41

Answer 42

With the exception of cases involving willful violations of any provision of IRC §
6050I, all of the offenses under Section 7203 are misdemeanors. Therefore, except for
Section 6050I felonies, Section 7203 prosecutions may be initiated either by information
or indictment. Reference should be made to Section 25.00, infra, for additional discussion
of violations of Section 6050I

U.S. DEPARTMENT oF JUSTICE
TAX DIVISION
CRIMINAL TAX MANUAL

Answer 43

§7203. Willful failure to file return, supply information, or pay tax
Any person required under this title to pay any estimated tax or tax, or
required by this title or by regulations made under authority thereof to
make a return, keep any records, or supply any information, who willfully
fails to pay such estimated tax or tax, make such return, keep such records,
or supply such information, at the time or times required by law or
regulations, shall, in addition to other penalties provided by law, be guilty
of a misdemeanor and, upon conviction thereof, shall be fined . . ., or
imprisoned not more than 1 year, or both, together with the costs of
prosecution. In the case of any person with respect to whom there is a
failure to pay any estimated tax, this section shall not apply to such person
with respect to such failure if there is no addition to tax under section 6654
or 6655 with respect to such failure. In the case of a willful violation of
any provision of section 6050I, the first sentence of this section shall be
applied by substituting “felony” for “misdemeanor” and “5 years” for “1
year.”1

U.S. DEPARTMENT oF JUSTICE
TAX DIVISION
CRIMINAL TAX MANUAL

Question 44

Penalties

Answer 44

1 For the misdemeanor offenses set forth in section 7203, the maximum permissible fine is at least
$100,000 for individuals and at least $200,000 for organizations. For felony offenses under section 7203
involving willful violations of section 6050I, the maximum permissible fine is at least $250,000 for
individuals and at least $500,000 for organizations. 18 U.S.C. § 3571(b) & (c). Alternatively, “[i]f any
person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other
than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice
the gross loss ……. ” 18 U.S.C. § 3571(d).

U.S. DEPARTMENT oF JUSTICE
TAX DIVISION
CRIMINAL TAX MANUAL

Question 45

7203 Situations

Answer 45

Section 7203 covers four different situations, each of which constitutes a failure
to timely perform an obligation imposed by the Internal Revenue Code: (1) failure to pay
an estimated tax or tax, (2) failure to make (file) a return, (3) failure to keep records, and
(4) failure to supply information.

U.S. DEPARTMENT oF JUSTICE
TAX DIVISION
CRIMINAL TAX MANUAL

Question 46

Sansone v. United States, 380 U.S. 343, 351 (1965).

Answer 46

Failure to perform an obligation in any one of the categories may constitutean
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offense.

Question 47

United States v. Harris, 726 F.2d 558, 560 (9th Cir. 1984) and additional case

United States v. Stuart, 689 F.2d 759, 763 (8th Cir. 1982) (same).

Answer 47

(defendant who failed to file
for three years guilty of three separate offenses rather than one continuing offense);

Question 48

26 U.S.C. § 7701(a)(1). Person def

Answer 48

The term “person” is “construed to mean and include an individual, a trust, estate,
partnership, association, company or corporation.”

Question 49

See United
States v. Neal, 93 F.3d 219, 223 (6th Cir. 1996); Ryan v. United
States, 314 F.2d 306, 309 (10th Cir. 1963).

Answer 49

(corporate officers liable under Section
7203 for failure to file employer’s quarterly tax return (Form 941));

Question 50

To establish the offense of failure to make (file) a return, the government must
prove three essential elements beyond a reasonable doubt:

Answer 50

1. The defendant was a person required to file a return;
2. The defendant failed to file at the time required by law;
   and
3. The failure to file was willful.

U.S. DEPARTMENT oF JUSTICE
TAX DIVISION
CRIMINAL TAX MANUAL

Question 51

Major cases re elements of failure to file

Answer 51

United States v. Hassebrock, 663 F.3d 906, 919 (7th Cir. 2011); United States v.
McKee, 506 F.3d 225, 244 (3d Cir. 2007); United States v. Clayton, 506 F.3d 405, 408
(5th Cir. 2007); United States v. Vroman, 975 F.2d 669, 671 (9th Cir. 1992); United
States v. Harting, 879 F.2d 765, 766-67 (10th Cir. 1989); United States v. Williams,
875 F.2d 846, 849 (11th Cir. 1989); United States v. Foster, 789 F.2d 457, 460 (7th Cir.
1986); United States v. Ostendorff, 371 F.2d 729, 730 (4th Cir. 1967); cf. United States
v. Doyle, 956 F.2d 73, 74-75 (5th Cir. 1992) (in case in which there was no issue about
Last updated March 2015
whether defendant was a person required to file a return, Fifth Circuit listed elements of
misdemeanor failure to make return as willfulness and failure to make a return when
due).

Question 52

who must file

Answer 52

“[e]very individual having for the taxable year gross income which equals or exceeds the
exemption amount,” with certain specified exceptions,

Question 53

see also United States v. McKee, Burden of proof

Answer 53

(government must prove that an individual has a duty to file a tax return based on the
receipt of income of a taxable nature, and bears burden of proving taxable character of
funds).

506 F.3d 225, 245 (3d Cir. 2007)

Question 54

See United States v. Clayton, basis for exemption amount

Answer 54

(noting that filing requirement is tied to the “exemption amount,” which is based, in part,
on the Consumer Price Index).

506 F.3d 405, 409 & nn.1 & 2 (5th Cir. 2007)

Question 55

United States v. Bianco, Method of proof

Answer 55

Where the
government is unable to present direct evidence of gross income, its burden may be
satisfied by means of an indirect method of proof. (evidence of expenditures in excess of the statutory minimum plus evidence negating nontaxable sources);

534 F.2d 501, 503-06 (2d Cir. 1976)

Question 56

United States v. Shy, method of proof

Answer 56

(net worth)

383 F. Supp. 673, 675 (D.
Del. 1974)

Question 57

United States v.
Francisco, method of meeting burden re gross receipts

Answer 57

To meet its burden, the government need prove only that gross receipts exceed the cost of
goods sold by an amount sufficient to trigger the reporting requirement.

614 F.2d 617, 618 (8th Cir. 1980)

Question 58

United States v. Bell
Burden

Answer 58

The burden then shifts to the enterprise to come forward with evidence of offsetting
expenses.

734 F.2d 1315, 1317 (8th Cir. 1984);

Question 59

United States v. Schiff, willfuliness proof

Answer 59

(proof of willfulness included previously filed corporate and personal
returns and reminder by accountant);

612 F.2d 73, 77-78
(2d Cir. 1979)

Question 60

United States v. Boulerice, willfulness proof

Answer 60

(in tax evasion case, “the government does not need to show direct evidence of
tax motivation so long as jury has a sufficient circumstantial basis for inferring
willfulness”);

325 F.3d 75, 80 (1st
Cir. 2002)

Question 61

United States v. Bishop, willfulness proof

Answer 61

(listing range of
conduct that can support a finding of willful attempt to evade taxation);

264 F.3d 535, 550 (5th Cir. 2001)

Question 62

United States v. Daraio, willfulness proof

Answer 62

A defendant’s past taxpaying history is admissible to prove willfulness
circumstantially.

445 F.3d 253, 264 (3d Cir. 2006);

Question 63

United States v.
Greenlee Willfulness proof

Answer 63

Willfulness may be inferred from a pattern of failing
to file for consecutive years in which returns should have been filed.
517 F.2d 899, 903 (3d Cir. 1975).

Question 64

United States v.
Shivers, Willfulness examples

Answer 64

Willfulness may also be shown by such acts as mailing tax defier materials to the
IRS, disregarding IRS warning letters, and filing contradictory forms. (defendant filed a W-4 claiming he was
exempt from withholding only four days after filing a W-4 claiming three allowances);

788 F.2d 1046, 1047-48 (5th Cir. 1986)

Question 65

United States v. Briscoe, willfulness evidence

Answer 65

65 F.3d 576,
588 (7th Cir. 1995) (evidence indicated that, except for one year, defendant failed to file
or filed late in every year in which he owed taxes in excess of the amount withheld);

Question 66

United States v. Williams,
United States v.
Bussey
United States v. Mapelli,

Answer 66

Because willfulness requires a voluntary and intentional violation of a known
legal duty, a defendant’s ignorance of the illegality of a failure to timely file a tax return
is a defense to a finding that the defendant acted willfully. Such ignorance is not a
defense, however, if the defendant purposefully sought to avoid knowledge by, for
example, “consciously avoid[ing] any opportunity to learn what the tax consequences
were.

612 F.3d 500, 506-07 (6th Cir. 2010)” , 942 F.2d 1241, 1248 (8th Cir. 1992); 971 F.2d 284,
286 (9th Cir. 1992).

Answer 67

The Fourth Circuit noted that the government in criminal prosecution elects to
establish a defendant’s guilty knowledge by one of two different means. United States v.
Poole, 640 F.3d 114, 121 (4th Cir. 2011). The government may show that “the defendant
was aware of a particular fact or circumstance, or that the defendant knew of a high
probability that a fact or circumstance existed and deliberately sought to avoid
confirming that suspicion.” Id. Under the second method, evidence establishing a
defendant’s “willful blindness” constitutes proof of his subjective state of mind, thus
satisfying the scienter requirement of knowledge.” Id. citing United States v.
Stadtmauer, 620 F.3d 238, 245 (3d Cir. 2010) and United States v. Bussy,supra.

Question 68

United
States v. Fingado, willul ignornance standard

Answer 68

Even if the defendant successfully avoided actual knowledge of the fact, “[t]he
required knowledge is established if the accused is aware of a high probability of the
existence of the fact in question unless he actually believes it does not exist.” 934 F.2d 1163, 1166 (10th Cir. 1991).

Question 69

United States v. Mapelli, conscious avoidance inst

Answer 69

A conscious avoidance instruction “is appropriate only
when the defendant purposely contrives to avoid learning all the facts, as when a drug
courier avoids looking in a secret compartment he sees in the trunk of a car, because the
courier knows full well that he is likely to find drugs there.”
971 F.2d 284, 286 (9th Cir. 1992).

Question 70

United States v. Hicks, venue

Answer 70

947 F.2d 1356, 1361 (9th
Cir. 1991) (“Failure to file a tax return is an offense either at the defendant’s place of
residence, or at the collection point where the return should have been filed”);

Question 71

Place of filing returns

Answer 71

Section 6091 of the Code sets forth the places for filing returns. In those instances
where the Code does not provide for the place of filing, the Secretary “shall by
regulations prescribe the place for the filing.” 26 U.S.C. § 6091(a).

Question 72

statute of l failure to file

Answer 72

The statute of limitations for a failure to file a return is six years, except for
information returns required under Part III of subchapter A of Chapter 61 of the Internal
Revenue Code. 26 U.S.C. § 6531(4).

Answer 73

The statute of limitations is computed from the due date of the return. See Section
10.05[3][b], supra. In the case of an individual, this will usually be April 15th, unless an
extension of time within which to file is granted (26 U.S.C. § 6081), in which case the
limitations period is computed from the extended compliance date. See generally United
States v. Phillips, 843 F.2d 438 (11th Cir. 1988); United States v. Goldstein, 502 F.2d
526, 529-530 (3d Cir. 1974). If April 15th fell on a Saturday, Sunday, or legal holiday,
the due date was the next succeeding day that was not a Saturday, Sunday, or legal
holiday. Note that taxpayers who file at the Andover Service Center receive an extra day
to file in those years in which the filing date coincides with Patriots’ Day in
Massachusetts, which falls on the third Monday of April.

Question 74

Difference between evasion and failure

Answer 74

, 380 U.S. 343,
351 (1965); United States v. Mal, 942 F.2d 682, 684 (9th Cir. 1991) (“What distinguishes
[the felony offense of evasion] from the misdemeanor offense of willful failure to file a
return, supply information, or pay taxes, which is set out in 26 U.S.C. § 7203, is the
requirement of an affirmative act.”).

Question 75

United States v. Tucker - failure to pay obligation description

Answer 75

686 F.2d 230, 233 (5th Cir. 1982); but see United
States v. McGill, 964 F.2d 222, 238 n.30 (3d Cir. 1992) (declining to resolve the thenLast
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existing circuit split on whether the taxpayer’s ability to pay was relevant to the
willfulness of the failure to pay). As the Fifth Circuit stated:
Every United States citizen has an obligation to pay his income tax when
it comes due. A taxpayer is obligated to conduct his financial affairs in
such a way that he has cash available to satisfy his tax obligations on time.
As a general rule, financial ability to pay the tax when it comes due is not
a prerequisite to criminal liability under § 7203. Otherwise, a recalcitrant
taxpayer could simply dissipate his liquid assets at or near the time when
his taxes come due and thereby evade criminal liability.
Tucker, 686 F.2d at 233.

Question 76

United
States v. Cabrales, venue failure to pay

Answer 76

524 U.S. 1, 6 (1998) (“The Constitution twice safeguards the
defendant’s venue right: Article III, § 2, cl. 3, instructs that ‘Trial of all Crimes . . . shall
be held in the State where the said Crimes shall have been committed’;

Answer 77

The “‘locus delicti must be determined from the nature of the crime alleged and the
location of the act or acts constituting it.’” United States v. Cabrales, 524 U.S. at 6-7
(quoting United States v. Anderson, 328 U.S. 699, 703 (1946)).

Question 78

26 U.S.C. § 6531(4). SOL Failure to pay

Answer 78

The statute of limitations is six years “for the offense of willfully failing to pay
any tax . . . at the time or times required by law or regulations.”

Question 79

United
States v. Collins,
United States v. Matosky,
defense of negligence

Answer 79

Because failure to file and failure to pay are specific intent crimes, negligence is
insufficient to establish willfulness. The government must prove that the defendant acted
purposefully, as distinguished from inadvertently, negligently, or mistakenly. 457 F.2d 781, 783 (6th Cir 1972); 421 F.2d
410, 413 (7th Cir. 1970).

Answer 80

In United States v. Franks, 723 F.2d 1482, 1485 (10th Cir. 1983), the defendants
falsely answered “No” to questions on income tax returns asking if they had any interest
- 27 -
9080535.1
in or signature authority over bank accounts in a foreign country. They also attached a
form to their amended return which did not list “all of their foreign accounts over which
they had control.” (Emphasis in original). The court affirmed the false return convictions,
holding that the false responses to these questions “comes within the purview of
26 U.S.C. § 7206(1).” Franks, 723 F.2d at 1486; accord United States v. Harvey, 869
F.2d 1439, 1441 & n.2 (11th Cir. 1989) (failing to report interest income from Cayman
Islands accounts on Schedule B and falsely answering “no” on Schedule B, Part III
(Foreign Accounts and Foreign Trusts), Form 1040, supported a charge defendant
violated § 7206(1)).

Question 81

United States v. Claiborne willfulness proof signing tax return

Answer 81

Section 7206(1) is a specific intent crime requiring a showing of willfulness.
Proof of this element is essential, and “neither a careless disregard whether one’s actions
violate the law nor gross negligence in signing a tax return will suffice.” 765 F.2d 784, 797 (9th Cir. 1985), abrogation

Answer 82

In computing the defendant’s taxable income and tax for each prosecution year,
the government generally is required to follow the accounting method used by the
defendant. If the defendant was on the cash basis during the prosecution year, then the
government’s proof also must be computed on the cash basis, under which income is
reported when it is received, and expenses are deducted only in the year in which they are
actually paid. See United States v. Wiese, 750 F.2d 674, 677 (8th Cir. 1984) (a bank
deposits case stating the general rule that a cash basis taxpayer must report income in the
taxable year of actual or constructive receipt). See also Treas. Reg. § 1.446-1(a)(1) &
(c)(1)(i).

Question 83

United States v. Wilkins,

Answer 83

The government cannot establish a tax deficiency by attributing income to a year
in which it does not belong. 385 F.2d 465, 469-71 (4th Cir.
1967).

Answer 84

The bank deposits method of proof is one of the primary indirect methods of
proof used by the government in computing taxable income. United States v. Boulet,
577 F.2d 1165 (5th Cir. 1978), contains a good description of the mechanics of a bank
deposits computation:
Under this method, all deposits to the taxpayer’s bank and similar
accounts in a single year are added together to determine the gross
deposits. An effort is made to identify amounts deposited that are
non-taxable, such as gifts, transfers of money between accounts,
repayment of loans and cash that the taxpayer had in his possession
prior to that year that was deposited in a bank during that year.
This process is called “purification.” It results in a figure called net
taxable bank deposits.
The government agent then adds the amount of expenditures made
in cash, for example, in this case, cash the doctor received from
fees, did not deposit, but gave to his wife to buy groceries. The
total of this amount and net taxable bank deposits is deemed to
equal gross income. This is in turn reduced by the applicable
deductions and exemptions. The figure arrived at is considered to
be “corrected taxable income.” It is then compared with the taxable
income reported by the taxpayer on his return.

Answer 85

Cases using the bank deposits method have involved a wide range of incomeproducing
activities. See, e.g., United States v. Soulard, 730 F.2d 1292, 1296 (9th Cir.
1984) (ice cream franchises); United States v. Hall, 650 F.2d 994, 996 (9th Cir. 1981)
(clothing, jewelry, and antiques retailer); United States v. Fowler, 605 F.2d 181, 182
(5th Cir. 1979) (gravestone dealer); United States v. Boulet, 577 F.2d 1165, 1167
(5th Cir. 1978) (medical doctor); United States v. Esser, 520 F.2d 213, 215 (7th Cir.
1975) (medical doctor); United States v. Slutsky, 487 F.2d 832, 835 (2d Cir. 1973)
(partners in a resort hotel in the Catskill Mountains); United States v. Stein, 437 F.2d
775, 776 (7th Cir. 1971) (wholesale meat dealer); United States v. Lacob, 416 F.2d 756,
758 (7th Cir. 1969) (personal injury attorney); Percifield v. United States, 241 F.2d 225,
226 (9th Cir. 1957) (operator of a gambling casino); United States v. Nunan, 236 F.2d
576, 579 (2d Cir. 1956) (attorney, politician, and former Commissioner of Internal
Revenue); Graves v. United States, 191 F.2d 579, 581 (10th Cir. 1951) (retail drug
stores); United States v. Venuto, 182 F.2d 519, 520 (3d Cir. 1950) (operator of a retail
meat store, slaughterhouse, and rental properties).

Answer 86

The income-producing business can be an illegal activity. See, e.g., United States
v. Abodeely, 801 F.2d 1020, 1025 (8th Cir. 1986) (prostitution); United States v. Tafoya,
757 F.2d 1522, 1526-27 (5th Cir. 1985) (freelance assassin); United States v. Vannelli,
595 F.2d 402, 404 (8th Cir. 1979) (embezzlement); Malone v. United States, 94 F.2d
281, 287-88 (7th Cir. 1938) (bribes). Caution must be exercised, however, in the use and
presentation of evidence relating to an illegal source of income. See Section 31.12[3],
supra, for a further discussion of issues involving illegal sources ofincome.

Answer 87

REASONABLE LEADS
The government must investigate any reasonable, relevant leads furnished by a
defendant that are reasonably susceptible of being checked and which, if true, would
establish the defendant’s innocence. United States v. Conaway, 11 F.3d 40, 43-44 (5th
Cir. 1993); United States v. Ludwig, 897 F.2d 875, 882 (7th Cir. 1990); United States v.
Hall, 650 F.2d 994, 1000 (9th Cir. 1981); United States v. Boulet, 577 F.2d 1165, 1169
(5th Cir. 1978); United States v. Esser, 520 F.2d 213, 217 (7th Cir. 1975); United States
v. Slutsky, 487 F.2d 832, 843 n.14 (2d Cir. 1973) (“[t]he contention that the ‘leads’
doctrine should be confined to a net worth case is no longer tenable”); United States v.
Ramsdell, 450 F.2d 130, 132 (10th Cir. 1971); United States v. Stein, 437 F.2d 775, 778
(7th Cir. 1971).

Question 88

reasonable leads

Answer 88

If the government fails to investigate a reasonable lead timely furnished by the
defendant, the trial court may consider the defendant’s version as true and so instruct the
jury. Hall, 650 F.2d at 1000; see also Holland v. United States, 348 U.S. 121, 136 (1954)
(“When the Government fails to show an investigation into the validity of such leads, the
trial judge may consider them as true and the Government’s case insufficient to go to the
jury.”).

Question 90

Despac

Answer 90

Spac merges with target after target agrees to acquisition

Question 91

Theia holdings A

Answer 91

Entity that possessed the licenses