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Dr. Bradford G. Brown (my brother) was convicted for tax evasion on March 13, 2003 (Case # 3:02-cr-14 in the Middle District of Georgia). Presiding judge was District Judge Hugh Lawson and prosecutors were Attorney Glenn A. Makl and Attorney Jennifer P. Burnett of the Department of Justice - Tax Division; defense attorney was Clifton Boone of Sparta, Georgia. He was convicted for tax years (1994, 1995) in association with a tax loss of $232,764.00 for 1994 and $341,476.00 for 1995.Prosecutors requested that the associated tax loss be accumulated for all years from 1993 forward through 2001, as continued relevant conduct. Judge Lawson granted the request, resulting in a total associated tax loss of $1,561,400.00 and $1,521.600.00 in interest and penalties (for total restitution obligation of $3,083,000.00).
Dr. Brown was sentenced to 41 months of prison time (followed by 3 years of supervised release), and to pay monetary assessment of $200.00, fine of $40,000.00 and restitution of $3,083,000.00. Dr. Brown surrendered to Maxwell Air Force Base Federal Prison Camp (Montgomery, Alabama 36112) to begin serving his 41 month sentence on August 22, 2003 (Inmate #: 91022-020).
The tax loss was provided by Dr. Brown's accountant, Arthur Smith (in a set of tax returns, filed to IRS in 2002). Accountant Smith explained to Dr. Brown that there were records missing, and that in light of the fact that (the IRS had served notice that they had been auditing Dr. Brown since March of 1997 and had determined that Dr. Brown's case would be referred to the Criminal Division for prosecution for tax evasion), a defensive filing was called for. According to Accountant Smith's affidavit, a defensive filing counts all money deposited as taxable unless there is written proof to the contrary, and treats all money expended as nondeductible unless there is written proof to the contrary.
The net effect of this approach was that the income was overstated and the deductions were understated. See case docket entry ("Doc.") 87, Exhibit B for Accountant Smith's affidavit.
On March 30, 2004, IRS agent (James Kohler) provided to Dr. Brown (through his appeal attorney, Ceasar Richbow, and me), $186,945.00 of nontaxable CD deposits that had been counted in the 1994 returns as taxable.
At that point Dr. Brown asked me to carefully review the available records to determine his true 1994 tax liability. I took my findings to Certified Public Accountant ("CPA") Edisel Collier, who produced an amended return that showed that the true tax liability for 1994 was zero with more than $64,000.00 of negative income available to reduce the tax liability for 1995.
Upon release from prison Dr. Brown presented this new information to the Court (October 23, 2006) by filing (pro se) Doc. 121, MOTION FOR RECONSIDERATION OF RESTITUTION AND FINE. To this point, Judge Lawson has refused to rule on Doc. 121. Note that tax evasion is not possible in the face zero tax liability. United States v. Edwards, 777 F.2d 644, 650 (11th Cir. 1985). Therefore, Dr. Brown could not have been guilty of tax evasion for tax year 1994 (notwithstanding his conviction for said tax year).
