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2013 Guidelines Amendments

By David Debold and Matthew Benjamin
June 21, 2013

On April 10, 2013, the United States Sentencing Commission promulgated its annual amendments to the federal sentencing guidelines. These amendments continue the trend, which we described in these pagesone year ago (David Debold and Matthew Benjamin, Increased Fraud Penalties Are on the Horizon, 19 Business Crimes Bulletin 11 (July 2012)), of stiffened sentences for economic crimes. Specifically, the Commission voted to increase penalties for: 1) theft and fraud involving pre-retail medical products; 2) trafficking in counterfeit drugs and military equipment; and 3) foreign dissemination of stolen trade secrets.

In a rare and welcome bit of good news for white-collar defendants, however, the Commission also made an important change that will reduce sentences for tax offenses. A current rule in several federal circuits frequently causes “tax loss” to be overstated for sentencing purposes: It directs courts to consider only the amount of undeclared income, thus forbidding consideration of the deductions that would have been available had the defendant reported the undeclared income. The amendment will now require courts to consider the other side of the ledger: related deductions, exemptions, or credits that could have been included on a lawfully filed tax return, thus reducing the tax that was owed.'

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