The Fifth Amendment Privilege Against Self-Incrimination and Tax Returns: Oil and Water or Peanut Butter and Jelly?

By Bryan C. Skarlatos
Journal of Tax Practice & Procedure
February - March 2016 Edition

Tax returns require a wealth of specific financial information that sometimes can be used against a taxpayer in a criminal investigation or prosecution. If a taxpayer is engaged in an illegal business, such as gambling or drugs, the disclosure that the taxpayer earns a lot of money, or has substantial assets, can be an important element of proof against the taxpayer. In less obvious cases, the fact that taxpayer will suddenly report substantial income that was not disclosed on prior returns, or will have a change of inventory valuation that will not match prior returns, or has a foreign bank account that had not been previously reported, could be used as a link in the chain of evidence leading to a tax prosecution relating to those prior tax returns. In such cases, taxpayers must carefully consider whether they have a Fifth Amendment privilege not to provide such incriminating information and, if so, how that privilege can be asserted. 

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