Don't Mess With Taxes

The IRS, which is always nagging us taxpayers to be careful in filing our returns, needs to talk to its government colleagues in the Justice Department about their paperwork protocols.

Poorly written prosecutorial documents just cost Uncle Sam more than $100 million in what was supposed to have been the feds' biggest tax prosecution ever.

Telecommunications entrepreneur Walter Anderson admitted hiding hundreds of millions of dollars from the IRS and District of Columbia tax collectors. Federal prosecutors said Anderson used offshore corporations to disguise his ownership in telecommunications companies that earned more than $450 million between 1995 and 1999. He was charged with not filing federal income tax returns from 1987 to 1993.

For those evasive maneuvers, Anderson was sentenced Tuesday to nine years in prison and ordered to repay about $23 million to Washington, D.C.

But five (or more) times that amount went down the proverbial drain.

The presiding judge said he couldn't order Anderson to repay the U.S. Treasury the $100-to-$175 million that the feds estimated he bilked from Uncle Sam because the Justice Department's binding plea agreement with Anderson listed the wrong statute.

The judge said he could have worked around that problem by ordering Anderson to repay the money as part of his probation. That option was unavailable, however, because prosecutors omitted any discussion of probation, which typically is part of plea agreements, from Anderson's paperwork.

You can read the Department of Justice's press release issued last September following Anderson's guilty plea. And then read (and weep about) the details of this week's sentencing snafu here.