SUPREME COURT OF THE UNITED STATES | Relevant Cases in the field of international taxation | permanent residents | Relevant Cases in the field of international taxation

SUPREME COURT OF THE UNITED STATES

Akio Kawashima

v.

Eric H. Holder, Jr., Attorney General*

THOMAS, GINSBURG,

BREYER AND KAGAN, JJ.

NO. 10-577

FEBRUARY 21, 2012

United States - Section 7206 of 26 US Code (Internal Revenue Code), read with 8 US Code (Allience and Nationality Code) - Fraud and false statements - Petitioners, AK and his wife FK, natives and citizens of Japan and lawfully permanent residents of United States, were issued removal order in 1997 by Immigration Judge who determined AK's conviction for wilfully making and subscribing false tax return in violation of 26 U. S. C. §7206(1) and FK's conviction for aiding and assisting in preparation of false tax return in violation of 26 U. S. C. §7206(2) - He concluded that such violations committed by petitioners were crimes involving fraud or deceit under Clause (i) and (ii) of §1101(a)(43) (M) of 8 US Code and were, therefore, qualified as aggravated felonies leading to their deportation from United States - Whether although words "fraud" and "deceit" are absent from text of §7206(1) and are not themselves formal elements of crime, it did not follow that AK's offense fell outside of Clause (i) - Held, yes - Whether scope of clause (i) is not limited to offenses that included fraud or deceit as formal elements - Held, yes - Whether by knowingly and wilfully assisting her husband's filing of a materially false tax return, FK also committed a felony that involved 'deceit' - Held, yes - Whether clause (i) states that if anyone is convicted of an offense that involves fraud or deceit in which loss to victim or victims exceeds $10,000, he has committed an aggravated felony and is subject to deportation pursuant to 8 U. S. C. §1227(a)(2)(A)(iii) - Held, yes - Whether elements of wilfully making and subscribing a false corporate tax return in violation of 26 U. S. C. §7206(1) and of aiding and assisting in preparation of a false tax return in violation of 26 U. S. C. §7206(2), establish that those crimes are deportable offenses because they necessarily entail deceit - Held, yes - Whether since instant case, there were convictions under 26 U. S. C. §§7206(1) and (2) in which revenue loss to Government exceeded $10,000, same would qualify as aggravated felonies and, therefore, both AK and FK would be subjected to deportation as aliens - Held, yes. [In favour of respondent]

FACTS

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The petitioners, AK and his wife FK, were natives and citizens of Japan who had been lawful permanent residents of the United States. In 1997, AK pleaded guilty to one count of wilfully making and subscribing a false tax return in violation of 26 U.S.C. §7206(1). FK pleaded guilty to one count of aiding and assisting in the preparation of a false tax return in violation of 26 U.S.C. §7206(2). Following their convictions, the Immigration and Naturalization Service charged both AK and FK under sub-paragraph (M) of §1101(a)(43) with being deportable from the United States as aliens who had been convicted of an aggravated felony. The Immigration Judge, at deportation hearing, disagreed with AK and FK's argument regarding their convictions and ordered removal, concluding that AK and FK's convictions qualified as aggravated felonies. AK and FK appealed the removal order to the Board of Immigration Appeals, which affirmed the Immigration Judge's decision. After unsuccessfully petitioning the Board to reopen its decision, AK and FK filed petitions for review of the Board's decision in the United States Court of Appeals for the Ninth Circuit. However, the court concluded that AK's conviction under §7206(1) qualified as an aggravated felony. The Ninth Circuit also determined that FK's conviction under §7206(2) "necessarily 'involved fraud or deceit.' but because FK's plea agreement was not in the administrative record, the Ninth Circuit remanded to the Board to determine whether FK's conviction had caused a loss to the Government in excess of $10,000. The Supreme Court granted both AK and FK's petition for a writ of certiorari to determine whether their convictions for violations of 26 U.S.C. §§7206(1) and (2) respectively qualified as aggravated felonies under 8 U.S.C. §1101(a)(43)(M)(i).

HELD

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AK was convicted of violating 26 U.S.C. §7206(1), which provided that any person who "[w]ilfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter," would be guilty of a felony. AK did not dispute that the elements of a violation of §7206(1) included, inter alia, that the document in question was false as to a material matter, that the defendant did not believe the document to be true and correct as to every material matter, and that he acted wilfully with the specific intent to violate the law. Although the words "fraud" and "deceit" were absent from the text of §7206(1) and were not themselves formal elements of the crime, it did not follow that his offense fell outside of Clause (i). The scope of that clause was not limited to offenses that included fraud or deceit as formal elements. Rather, Clause (i) referred more broadly to offenses that "involv[ed]" fraud or deceit—meaning offenses with elements that necessarily entailed fraudulent or deceitful conduct. [Para 9]

When sub-paragraph (M) of 8 USC §1101(a)(43) was enacted, the term "deceit" meant "the act or process of deceiving (as by falsification, concealment, or cheating)." AK's conviction under §7206(1) established that he knowingly and wilfully submitted a tax return that was false as to a material matter. He, therefore, committed a felony that involved "deceit." [Para 10]

Turning to FK, this court's analysis followed a similar path. FK was convicted of violating 26 U.S.C. §7206(2), which declared that any person who "[w]ilfully aids or assists in . . . the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter," had committed a felony. FK did not dispute that the elements of a violation of §7206(2) included, inter alia, that the document in question was false as to a material matter and that the defendant acted willfully. It was to be concluded that FK's conviction established that, by knowingly and willfully assisting her husband's filing of a materially false tax return, FK also committed a felony that involved "deceit." The language of Clause (i) was clear. Anyone who was convicted of an offense that "involves fraud or deceit in which the loss to the victim or victims exceeds $10,000" had committed an aggravated felony and was subject to deportation pursuant to 8 U.S.C. §1227(a)(2)(A)(iii). The elements of wilfully making and subscribing a false corporate tax return, in violation of 26 U.S.C. §7206(1), and of aiding and assisting in the preparation of a false tax return, in violation of 26 U.S.C. §7206(2), established that those crimes were deportable offenses because they necessarily entailed deceit. [Para 11]

AK and FK contended that textual differences between Clauses (i) and (ii) indicated that Congress intended to exclude tax crimes from Clause (i). Specifically, they noted that Clause (i) addressed "loss to the victim," whereas Clause (ii) addressed "revenue loss to the Government." [Para14]

This difference in language did not establish Congress' intent to remove tax crimes from the scope of Clause (i). Clause (i) covered a broad class of offenses that involved fraud or deceit. Clause (i) thus used correspondingly broad language to refer to the wide range of potential losses and victims. Clause (ii), on the other hand, was limited to the single type of offense "described in section 7201 of title 26 (relating to tax evasion)," which, by definition, could only cause one type of loss (revenue loss) to one type of victim (the Government). Congress' decision to tailor Clause (ii)'s language to match the sole type of offense covered by Clause (ii) did not demonstrate that Congress also intended to implicitly circumscribe the broad scope of Clause (i)'s plain language. [Para 15]

Next, AK and FK argued that interpreting Clause (i) to include tax crimes violated the presumption against superfluities by rendering Clause (ii) completely redundant to Clause (i). Clause (ii) explicitly stated that convictions for tax evasion pursuant to 26 U.S.C. §7201 that caused a revenue loss of at least $10,000 to the Government were aggravated felonies. AK and FK asserted that, if Clause (i) applied to tax crimes, then qualifying convictions for tax evasion under Clause (ii) would also qualify as aggravated felonies under Clause (i), because tax evasion was a crime involving fraud or deceit. To buttress this argument, AK and FK pointed to a body of law providing that a conviction for tax evasion under §7201 collaterally estopped the convicted taxpayer from contesting a civil penalty under 26 U.S.C. §6663(b) for "underpayment . . . attributable to fraud." ("Numerous federal courts have held that a conviction for federal income tax evasion, either upon a plea of guilty, or upon a jury verdict of guilt, conclusively establishes fraud in a subsequent civil tax fraud proceeding through application of the doctrine of collateral estoppel"). Therefore, according to AK and FK, if Clause (i) covered tax offenses, then Clause (ii) was mere surplusage. [Para 16]

This Court was not in agreement with AK and FK's contention that the specific mention of one type of tax crime in Clause (ii) impliedly limited the scope of Clause (i)'s plain language, which extended to any offense that "involves fraud or deceit." It was more likely that Congress specifically included tax evasion offenses under 26 U.S.C. §7201 in Clause (ii) to remove any doubt that tax evasion qualified as an aggravated felony. [Para 17]

Several considerations supported this conclusion. Like §§7206(1) and (2), §7201 did not, on its face, mention fraud or deceit. Instead, §7201 simply provided that "[a]ny person who wilfully attempts in any manner to evade or defeat any tax imposed by [the Internal Revenue Code] or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony." Accordingly, neither fraud nor deceit was among the elements of a conviction under §7201, which included: (1) wilfulness; (2) the existence of a tax deficiency; and (3) an affirmative act constituting an evasion or an attempted evasion of the tax. A conviction under §7201, therefore, only qualified as an aggravated felony under Clause (i) if a wilful, affirmative attempt to evade a tax necessarily entailed fraud or deceit. [Para 18]

Moreover, §7201 included two offenses: "the offense of wilfully attempting to evade or defeat the assessment of a tax as well as the offense of wilfully attempting to evade or defeat the payment of a tax." Sansone v. United States, 380 U.S. 343, 354 (1965). As the Government noted, it was possible to wilfully evade or defeat payment of a tax under §7201 without making any misrepresentation. For example, §7201 could be violated by a taxpayer who filed a truthful tax return, but who also took affirmative steps to evade payment by moving his assets beyond the reach of the Internal Revenue Service. Although the Government conceded that evasion-of-payment cases would almost invariably involve some affirmative acts of fraud or deceit, it was still true that the elements of tax evasion pursuant to §7201 did not necessarily involve fraud or deceit. Thus, it was to be concluded that the specific inclusion of tax evasion in Clause (ii) was intended to ensure that tax evasion pursuant to §7201 was a deportable offense. Clause (ii) did not implicitly remove all other tax offenses from the scope of Clause (i)'s plain language. [Para 20]

AK and FK also asserted that the separate treatment of tax crimes and crimes involving fraud and deceit in the United State Sentencing Guidelines supported their contention that Congress did not intend to include tax crimes within Clause (i). They pointed to the fact that, in 1987, the United States Sentencing Commission included within the Guidelines a category of "offenses involving fraud or deceit." The Commission simultaneously included "offenses involving taxation" as a separate category. Although AK and FK acknowledged that they had found no evidence that Congress actually considered the Guidelines, they contended that "it is likely that the language of [Clause (i)] and [Clause (ii)] was taken from the Sentencing Guidelines" by the sponsors of the bill that expanded the definition of aggravated felony to include sub-paragraph (M). Therefore, theoretically, it could be inferred from the similar language in the Guidelines that Congress did not intend Clause (i) to include tax crimes. [Para 21]

This Court had to reject AK and FK's reliance on the Guidelines. AK and FK's argument was at odds with the fact that, unlike the Guideline that AK and FK cited, Clause (ii) did not refer to all offenses "involving taxation." Rather, Clause (ii) was expressly limited to tax evasion offenses under §7201. That textual difference undercut any inference that Congress was considering, much less incorporating, the distinction drawn by the Guidelines. [Para 22]

Finally, AK and FK argued that sub-paragraph (M)'s treatment of tax crimes other than tax evasion was ambiguous, and therefore the statute should be construed in their favour. It was true that this Court had, in the past, construed ambiguities in deportation statutes in the alien's favour. However, this Court was of the opinion that the application of the present statute was clear enough that resort to the rule of lenity was not warranted. [Para 23]

For the foregoing reasons, it was to be concluded that convictions under 26 U.S.C. §§7206(1) and (2) in which the revenue loss to the Government exceeded $10,000 qualified as aggravated felonies pursuant to 8 U.S.C. §1101(a)(43)(M)(i). Because AK and FK were subject to deportation as aliens who had been convicted of aggravated felonies pursuant to 8 U.S.C. §1227(a)(2)(A)(iii), the judgment of the Court of Appeals was to be affirmed.

EDITOR'S NOTE

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(i) In the minority dissenting decision, it was held that making a material, false statement on a tax return did not qualify as an aggravated felony within the compass of 8 U.S.C. §1101(a)(43)(M)(i).

CASES REFERRED TO

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Gonzales v. Duenas - Alvarez 549 U.S. 183, Taylor v. United States 495 U.S. 575, United States v. Aramony 88 F 3d 1369 (CA4 1996), United States v. Kaiser 893 F 2d 1300 (CA11 1990), United States v. Marabelles 724 F 2d. 1374 (CA9 1984), United States v. Whyte 699 F. 2d 375 (CA7 1983), United States v. Sassak 881 F 2d 276 (CA6 1989), United States v. Hooks 848 F 2D 785 (CA7 1988), United States v. Dahlstrom 713 F 2d 1423 (CA9 1983), Gray v. Commissioner 708 F 2d 243 (CA6 1983), Boulware v. United States 552 U.S. 421 n2 (2008), United States v. Scharton 285 U.S. 518 (1932), Sansone v. United States 380 U.S. 343 (1965), INS v. St. Cyr. 533 U.S. 289 (2001), Fong How Tan v. Phelan 333 U.S. 6 (1948), Corley v. United States 556 U.S. 303 (2009), Hibbs v. Winn 542 U.S. 88 (2004), Spies v. United States 317 U.S. 492 (1943), Carty v. Ashcroft 395 F 3d 1081 n7 (CA9 2005), Considine v. United States 683 F 2d 1285 (CA9 1982), Costello v. Ins 311 F 2d 343 (CA2 1962), Klein v. Commissioner 880 F 2d 260 (CA10 1989), Tomlinson v. Lefkowiz 334 F 2d 262 (CAS 1964), Moore v. United States 360 F 2d 353 (CA4 1966), United States v. Scharton 285 U.S. 518 (1932), Tseung Chu v. Cornell 247 F 2d 929 n6 (CA9 1957), TRW Inc. v. Andrews 534 U.S. 19 (2001), Ferreira v. Ashcroft 390 F 3d. 1091 (CA9 2004), United States v. Olgin 745 F 2d 263 (CA3 1984) and Padilla v. Kentucky 559 U.S. (2010).

ORDER

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Thomas, J. - This case concerns whether aliens who commit certain federal tax crimes are subject to deportation as aliens who have been convicted of an aggravated felony. We hold that violations of 26 U. S. C. §§7206(1) and (2) are crimes "involv[ing] fraud or deceit" under 8 U. S. C. §1101(a)(43)(M)(i) and are therefore aggravated felonies as that term is defined in the Immigration and Nationality Act, 8 U. S. C. §1101 et seq., when the loss to the Government exceeds $10,000.

I

Petitioners, Akio and Fusako Kawashima, are natives and citizens of Japan who have been lawful permanent residents of the United States since June 21, 1984. In 1997, Mr. Kawashima pleaded guilty to one count of wilfully making and subscribing a false tax return in violation of 26 U. S. C. §7206(1). Mrs. Kawashima pleaded guilty to one count of aiding and assisting in the preparation of a false tax return in violation of 26 U. S. C. §7206(2).

Following their convictions, the Immigration and Naturalization Service charged the Kawashimas with being deportable from the United States as aliens who had been convicted of an aggravated felony.¹ See 8 U. S. C. §1227(a)(2)(A)(iii) ("Any alien who is convicted of an aggravated felony at any time after admission is deportable").² In the Immigration and Nationality Act, Congress listed categories of offenses that qualify as "aggravated felonies" for the purpose of deportation. See §1101(a)(43). Here, the Government charged the Kawashimas with being deportable for committing offenses under sub-paragraph (M) of §1101(a)(43). That sub-paragraph classifies as an aggravated felony an offense that either: "(i) involves fraud or deceit in which the loss to the victim or victims exceeds $10,000; or (ii) is described in section 7201 of title 26 (relating to tax evasion) in which the revenue loss to the Government exceeds $10,000." Hereinafter, we refer to §1101(a)(43)(M)(i) as "Clause (i)" and to §1101(a)(43)(M)(ii) as "Clause (ii)."

At their deportation hearing, the Kawashimas argued that their convictions under 26 U. S. C. §7206 did not qualify as aggravated felonies under sub-paragraph (M). The Immigration Judge disagreed and ordered removal, concluding that the Kawashimas' convictions qualified as aggravated felonies under Clause (i). The Kawashimas appealed the removal order to the Board of Immigration Appeals (Board), which affirmed the Immigration Judge's decision. After unsuccessfully petitioning the Board to reopen its decision, the Kawashimas filed petitions for review of the Board's decision in the United States Court of Appeals for the Ninth Circuit.

The Ninth Circuit held that "convictions for violating §§7206(1) and (2) in which the tax loss to the Government exceeds $10,000 constitute aggravated felonies under sub-section (M)(i)." 615 F. 3d 1043, 1053 (2010). The court concluded that Mr. Kawashima's conviction under §7206(1) qualified as an aggravated felony within Clause (i)'s definition "because it involved 'fraud or deceit' and because his offense resulted in a loss to the government in excess of $10,000." Id., at 1055. The Ninth Circuit also determined that Mrs. Kawashima's conviction under §7206(2) "necessarily 'involve[d] fraud or deceit.' " Id., at 1055. But because Mrs. Kawashima's plea agreement was not in the administrative record, the Ninth Circuit remanded to the Board to determine whether Mrs. Kawashima's conviction had caused a loss to the Government in excess of $10,000. Id., at 1056-1057.

We granted the Kawashimas' petition for a writ of certiorari to determine whether their convictions for violations of 26 U. S. C. §§7206(1) and (2) respectively qualify as aggravated felonies under 8 U. S. C. §1101(a)(43)(M)(i). 563 U. S. ___ (2011). We now affirm.

II

The Kawashimas argue that they cannot be deported for commission of an "aggravated felony" because crimes under §§7206(1) and (2) do not "involv[e] fraud or deceit" as required by Clause (i). The Kawashimas also assert that their convictions under §7206 are not "aggravated felonies" because tax crimes are not included within Clause (i) at all. We address each argument in turn.

A

The Kawashimas contend that their offenses of conviction do not fall within the scope of Clause (i) because neither "fraud" nor "deceit" is a formal element of a conviction under §7206(1) or §7206(2). The Government responds that the Kawashimas' convictions necessarily involved deceit because they required a showing that the Kawashimas wilfully made materially false statements. To determine whether the Kawashimas' offenses "involv[e] fraud or deceit" within the meaning of Clause (i), we employ a categorical approach by looking to the statute defining the crime of conviction, rather than to the specific facts underlying the crime. See Gonzales (supra) (applying the approach set forth in Taylor v. United States, 495 U. S. 575, 599-600 (1990)). If the elements of the offenses establish that the Kawashimas committed crimes involving fraud or deceit, then the first requirement of Clause (i) is satisfied.³

Mr. Kawashima was convicted of violating 26 U. S. C. §7206(1), which provides that any person who "[w]ilfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter," shall be guilty of a felony. Mr. Kawashima does not dispute that the elements of a violation of §7206(1) include, inter alia, that the document in question was false as to a material matter, that the defendant did not believe the document to be true and correct as to every material matter, and that he acted wilfully with the specific intent to violate the law. See, e.g., United States v. Aramony, 88 F. 3d 1369, 1382 (CA4 1996); United States v. Kaiser, 893 F. 2d 1300, 1305 (CA11 1990); United States v. Marabelles, 724 F. 2d 1374, 1380 (CA9 1984); United States v. Whyte, 699 F. 2d 375, 381 (CA7 1983). Although the words "fraud" and "deceit" are absent from the text of §7206(1) and are not themselves formal elements of the crime, it does not follow that his offense falls outside of Clause (i). The scope of that clause is not limited to offenses that include fraud or deceit as formal elements. Rather, Clause (i) refers more broadly to offenses that "involv[e]" fraud or deceit—meaning offenses with elements that necessarily entail fraudulent or deceitful conduct.

When sub-paragraph (M) was enacted, the term "deceit" meant a "the act or process of deceiving (as by falsification, concealment, or cheating)." Webster's Third New International Dictionary 584 (1993). Mr. Kawashima's conviction under §7206(1) establishes that he knowingly and wilfully submitted a tax return that was false as to a material matter. He therefore committed a felony that involved "deceit."

Turning to Mrs. Kawashima, our analysis follows a similar path. Mrs. Kawashima was convicted of violating 26 U. S. C. §7206(2), which declares that any person who "[w]illfully aids or assists in . . . the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter," has committed a felony. Mrs. Kawashima does not dispute that the elements of a violation of §7206(2) include, inter alia, that the document in question was false as to a material matter and that the defendant acted wilfully. See Aramony, supra, at 1382; United States v. Sassak, 881 F. 2d 276, 278 (CA6 1989); United States v. Hooks, 848 F. 2d 785, 788-789 (CA7 1988); United States v. Dahlstrom, 713 F. 2d 1423, 1426-1427 (CA9 1983). We conclude that Mrs. Kawashima's conviction establishes that, by knowingly and wilfully assisting her husband's filing of a materially false tax return, Mrs. Kawashima also committed a felony that involved "deceit."

The language of Clause (i) is clear. Anyone who is convicted of an offense that "involves fraud or deceit in which the loss to the victim or victims exceeds $10,000" has committed an aggravated felony and is subject to deportation pursuant to 8 U. S. C. §1227(a)(2)(A)(iii). The elements of wilfully making and subscribing a false corporate tax return, in violation of 26 U. S. C. §7206(1), and of aiding and assisting in the preparation of a false tax return, in violation of 26 U. S. C. §7206(2), establish that those crimes are deportable offenses because they necessarily entail deceit.

B

The Kawashimas' second argument is based on inferences drawn from the interaction of Clause (i) and Clause (ii). The full text of sub-paragraph (M) reads as follows:

"(43) The term 'aggravated felony' means—

"(M) an offense that—

"(i)  involves fraud or deceit in which the loss to the victim or victims exceeds $10,000; or

"(ii)  is described in section 7201 of title 26 (relating to tax evasion) in which the revenue loss to the Government exceeds $10,000."

The Kawashimas argue that when Clause (i) is read together with Clause (ii), Clause (i) must be interpreted as being inapplicable to tax crimes. In their view, sub-paragraph (M), when considered in its entirety, demonstrates that Congress was addressing two mutually exclusive categories of crimes in sub-paragraph (M)'s two clauses: general, non-tax crimes involving fraud or deceit that cause actual losses to real victims in Clause (i), and tax crimes involving revenue losses to the Government in Clause (ii). For the reasons discussed below, this argument cannot overcome the plain language of Clause (i), which encompasses the Kawashimas' offenses of conviction.

1

The Kawashimas contend that textual differences between Clauses (i) and (ii) indicate that Congress intended to exclude tax crimes from Clause (i). Specifically, they note that Clause (i) addresses "loss to the victim," whereas Clause (ii) addresses "revenue loss to the Government."

This difference in language does not establish Congress' intent to remove tax crimes from the scope of Clause (i). Clause (i) covers a broad class of offenses that involve fraud or deceit. Clause (i) thus uses correspondingly broad language to refer to the wide range of potential losses and victims. Clause (ii), on the other hand, is limited to the single type of offense "described in section 7201 of title 26 (relating to tax evasion)," which, by definition, can only cause one type of loss (revenue loss) to one type of victim (the Government). Congress' decision to tailor Clause (ii)'s language to match the sole type of offense covered by Clause (ii) does not demonstrate that Congress also intended to implicitly circumscribe the broad scope of Clause (i)'s plain language.

2

Next, the Kawashimas argue that interpreting Clause (i) to include tax crimes violates the presumption against superfluities by rendering Clause (ii) completely redundant to Clause (i). Clause (ii) explicitly states that convictions for tax evasion pursuant to 26 U. S. C. §7201 that cause a revenue loss of at least $10,000 to the Government are aggravated felonies. The Kawashimas assert that, if Clause (i) applies to tax crimes, then qualifying convictions for tax evasion under Clause (ii) would also qualify as aggravated felonies under Clause (i), because tax evasion is a crime involving fraud or deceit. To buttress this argument, the Kawashimas point to a body of law providing that a conviction for tax evasion under §7201 collaterally estops the convicted taxpayer from contesting a civil penalty under 26 U. S. C. §6663(b) for "underpayment . . . attributable to fraud." See, e.g., Gray v. Commissioner, 708 F. 2d 243, 246 (CA6 1983) ("Numerous federal courts have held that a conviction for federal income tax evasion, either upon a plea of guilty, or upon a jury verdict of guilt, conclusively establishes fraud in a subsequent civil tax fraud proceeding through application of the doctrine of collateral estoppel"). Therefore, according to the Kawashimas, if Clause (i) covers tax offenses, then Clause (ii) is mere surplusage.

We disagree with the Kawashimas' contention that the specific mention of one type of tax crime in Clause (ii) impliedly limits the scope of Clause (i)'s plain language, which extends to any offense that "involves fraud or deceit." We think it more likely that Congress specifically included tax evasion offenses under 26 U. S. C. §7201 in Clause (ii) to remove any doubt that tax evasion qualifies as an aggravated felony.

Several considerations support this conclusion. Like §§7206(1) and (2), §7201 does not, on its face, mention fraud or deceit. Instead, §7201 simply provides that "[a]ny person who wilfully attempts in any manner to evade or defeat any tax imposed by [the Internal Revenue Code] or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony." Accordingly, neither fraud nor deceit is among the elements of a conviction under §7201, which include: (1) wilfulness; (2) the existence of a tax deficiency; and (3) an affirmative act constituting an evasion or an attempted evasion of the tax. Boulware v. United States, 552 U. S. 421, 424, n. 2 (2008). A conviction under §7201, therefore, only qualifies as an aggravated felony under Clause (i) if a wilful, affirmative attempt to evade a tax necessarily entails fraud or deceit.

This Court's decision in United States v. Scharton, 285 U. S. 518 (1932), gave Congress good reason to doubt that a conviction under §7201 satisfies that condition. In Scharton, the defendant was indicted for attempting to evade income taxes by falsely understating his taxable income. The question before the Court was whether the crime was subject to the 3-year statute of limitations generally applicable to tax crimes, or whether it was instead subject to the 6-year statute of limitations applicable to "'offenses involving the defrauding or attempting to defraud the United States or any agency thereof, whether by conspiracy or not, and in any manner.'" Id., at 520, n. 2 (quoting 18 U. S. C. §585 (1962 ed., Supp. V)). The Government argued that the 6-year statute of limitations applied because "fraud is implicit in the concept of evading or defeating" and because any effort to evade a tax is tantamount to an attempt to defraud the taxing body. 285 U. S., at 520-521. The Court rejected that argument, noting that, in an indictment for evasion, "an averment [of intent to defraud] would be surplusage, for it would be sufficient to plead and prove a wilful attempt to evade or defeat." Id., at 521.

Moreover, §7201 includes two offenses: "the offense of wilfully attempting to evade or defeat the assessment of a tax as well as the offense of wilfully attempting to evade or defeat the payment of a tax." Sansone v. United States, 380 U. S. 343, 354 (1965) (emphasis in original). As the Government notes, it is possible to wilfully evade or defeat payment of a tax under §7201 without making any misrepresentation. For example, §7201 can be violated by a taxpayer who files a truthful tax return, but who also takes affirmative steps to evade payment by moving his assets beyond the reach of the Internal Revenue Service. Although the Government concedes that evasion-of-payment cases will almost invariably involve some affirmative acts of fraud or deceit, it is still true that the elements of tax evasion pursuant to §7201 do not necessarily involve fraud or deceit. Thus, we conclude that the specific inclusion of tax evasion in Clause (ii) was intended to ensure that tax evasion pursuant to §7201 was a deportable offense. Clause (ii) does not implicitly remove all other tax offenses from the scope of Clause (i)'s plain language.

3

The Kawashimas also assert that the separate treatment of tax crimes and crimes involving fraud and deceit in the United State Sentencing Guidelines supports their contention that Congress did not intend to include tax crimes within Clause (i). They point to the fact that, in 1987, the United States Sentencing Commission included within the Guidelines a category of "offenses involving fraud or deceit." USSG §§2F1.1 to 2F1.2 (deleted effective Nov. 1, 2001). The Commission simultaneously included "offenses involving taxation" as a separate category. §§2T1.1 et seq. (Nov. 2011). Although the Kawashimas acknowledge that they have found no evidence that Congress actually considered the Guidelines, they contend that "it is likely that the language of [Clause (i)] and [Clause (ii)] was taken from the Sentencing Guidelines" by the sponsors of the bill that expanded the definition of aggravated felony to include sub-paragraph (M). Brief for Petitioners 29. Therefore, the theory goes, we can infer from the similar language in the Guidelines that Congress did not intend Clause (i) to include tax crimes.

We reject the Kawashimas' reliance on the Guidelines. The Kawashimas' argument is at odds with the fact that, unlike the Guideline that the Kawashimas cite, Clause (ii) does not refer to all offenses "involving taxation." Rather, Clause (ii) is expressly limited to tax evasion offenses under §7201. That textual difference undercuts any inference that Congress was considering, much less incorporating, the distinction drawn by the Guidelines.

C

Finally, the Kawashimas argue that sub-paragraph (M)'s treatment of tax crimes other than tax evasion is ambiguous, and that we should therefore construe the statute in their favour. It is true that we have, in the past, construed ambiguities in deportation statutes in the alien's favour. See INS v. St. Cyr, 533 U. S. 289, 320 (2001). We think the application of the present statute clear enough that resort to the rule of lenity is not warranted.

** ** **

For the foregoing reasons, we conclude that convictions under 26 U. S. C. §§7206(1) and (2) in which the revenue loss to the Government exceeds $10,000 qualify as aggravated felonies pursuant to 8 U. S. C. §1101(a)(43)(M)(i). Because the Kawashimas are subject to deportation as aliens who have been convicted of aggravated felonies pursuant to 8 U. S. C. §1227(a)(2)(A)(iii), the judgment of the Court of Appeals is affirmed.

It is so ordered.

________________

 1.  On March 1, 2003, most of the functions of the Immigration and Naturalization Service were transferred to the Bureau of Immigration and Customs Enforcement, and the Immigration and Naturalization Service ceased to exist.

 2.  Before 1996, there were two procedures for removing aliens from the country: "deportation" of aliens who were already present, and "exclusion" of aliens seeking entry or reentry into the country. Since 1996, the Government has used a unified procedure, known as "removal," for both exclusion and deportation. See 8 U. S. C. §§1229, 1229a. We use the terms "deportation" and "removal" interchangeably in this opinion.

 3.  We note that the issue whether the Kawashimas' offenses satisfy the second requirement of Clause (i)—that the loss to the victim exceeded $10,000—is not before us. We address only whether their offenses of conviction qualify as crimes "involv[ing] fraud or deceit."

 

Ginsburg, J. (disenting) - Petitioner Akio Kawashima was convicted of preparing a false corporate tax return in violation of 26 U. S. C. §7206(1). His wife, petitioner Fusako Kawashima, was convicted under §7206(2) of assisting her husband in preparing the false return. The question presented is whether a conviction under §7206 is an "aggravated felony" that renders the Kawashimas deportable from the United States. See 8 U. S. C. §1227(a)(2)(A)(iii).

Congress has defined "aggravated felony" to include, inter alia, offenses that "(i) involv[e] fraud or deceit in which the loss to the victim or victims exceeds $10,000" or "(ii) [are] described in section 7201 of title 26 (relating to tax evasion) in which the revenue loss to the Government exceeds $10,000." §1101(a)(43)(M). The Kawashimas argue that tax offenses triggering deportation are delineated exclusively in §1101(a)(43)(M)(ii) (or Clause (ii)), and that §1101(a)(43)(M)(i) (or Clause (i)) does not encompass tax crimes. The Court rejects this argument, and holds that any tax offense "involv[ing] fraud or deceit," if the loss to the fiscal exceeds $10,000, ranks as an "aggravated felony." See ante, at 11. Because the Kawashimas' tax offense involved deceit and meets the monetary threshold, the Court concludes, they have committed an aggravated felony and are therefore deportable.

The Court's construction of the statute is dubious, as I see it. For one thing, it effectively renders Clause (ii) superfluous. Further, the Court's reading sweeps a wide variety of federal, state, and local tax offenses—including misdemeanors—into the "aggravated felony" category. In addition, today's decision may discourage aliens from pleading guilty to tax offenses less grave than tax evasion, thereby complicating and delaying enforcement of the internal revenue laws. I conclude that Clause (i) does not address tax offenses, and would therefore hold that making a false statement on a tax return in violation of §7206 is not an "aggravated felony."

I

Any alien convicted of an "aggravated felony" after admission to the United States is deportable. 8 U. S. C. §1227(a)(2)(A)(iii). Sub-paragraph (M) of §1101(a)(43) includes as an "aggravated felony":

"an offense that—

 "(i)  involves fraud or deceit in which the loss to the victim or victims exceeds $10,000; or

"(ii)  is described in section 7201 of title 26 (relating to tax evasion) in which the revenue loss to the Government exceeds $10,000."

Notably, Clause (i) speaks of "loss to the victim," Clause (ii) of "revenue loss to the Government." The Kawashimas contend that Clause (i) covers crimes of fraud or deceit causing losses unrelated to tax revenue. Tax crimes, they argue, are addressed exclusively in Clause (ii), and that clause designates only tax evasion proscribed by 26 U. S. C. §7201 as an "aggravated felony." Wilfully submitting a false statement proscribed by §7206, the Kawashimas maintain, is not an "aggravated felony" that would render them deportable under 8 U. S. C. §1227(a)(2)(A)(iii).

The Government contends that Clause (i) covers all tax offenses involving fraud or deceit, and that Congress included Clause (ii) out of caution, to make certain that persons convicted of tax evasion would be subject to deportation. Under the Government's construction, because the crime of making a false statement on a tax return involves "fraud" or "deceit," the Kawashimas committed an aggravated felony. See ante, at 5 ("the words 'fraud' and 'deceit' are absent from the text of §72O6(1) and are not themselves formal elements of the crime," nonetheless, "[the] elements [of a §72O6 crime] necessarily entail fraudulent or deceitful conduct").

The Court's task is to determine which reading of the statute is correct. If the two proffered constructions of sub-paragraph (M) are plausible in roughly equal measure, then our precedent directs us to construe the statute in the Kawashimas' favour. See Fong Haw Tan v. Phelan, 333 U. S. 6, 1O (1948) ("We resolve the doubts in favour of [the alien] because deportation is a drastic measure . . . ."); St. Cyr (supra) (same).

II

A

In interpreting 8 U. S. C. §1101(a)(43)(M), I would rely upon the familiar canon that statutes should be interpreted to avoid superfluity. See Corley v. United States, 556 U. S. 303, 314 (2009) (quoting Hibbs v. Winn, 542 U. S. 88, 101 (2004) ("[O]ne of the most basic interpretive canons" is that a "statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant . . . .")). If Clause (i) is construed to apply to tax crimes, then Clause (ii)'s discrete inclusion of tax evasion would add nothing, for tax evasion is itself an offense that, in all actual instances of which the Government is aware, "involves fraud or deceit." See §1101(a)(43)(M)(i); Tr. of Oral Arg. 30-31.

The elements of tax evasion are the existence of a tax deficiency, wilfulness, and "an affirmative act constituting an evasion or attempted evasion of the tax." Sansone (supra). As this Court's decisions indicate, the evasion of taxes involves deceit or fraud upon the Government, achieved by concealing a tax liability or misleading the Government as to the extent of the liability. See, e.g., Spies v. United States, 317 U. S. 492, 499 (1943) (an act of tax evasion may be "any conduct, the likely effect of which would be to mislead or to conceal"). Accordingly, courts have determined that tax evasion is a crime of moral turpitude, because it necessarily involves fraud. See, e.g., Carty v. Ashcroft, 395 F. 3d 1081, 1085, n. 7 (CA9 2005) (fraud is "implicit in the nature of the crime" of tax evasion); Considine v. UnitedStates, 683 F. 2d 1285, 1287 (CA9 1982) ("The express language of section 7201 requires an intent to avoid tax (a legitimate synonym for fraud)."); Costello v. INS, 311 F. 2d 343, 348 (CA2 1962) ("There can be no 'wilful' [tax] evasion without a specific intent to defraud."), received on other grounds, 376 U. S. 12O (1964).

Even more to the point, courts have held that a conviction for tax evasion under 26 U. S. C. §7201 "conclusively establishes fraud in a subsequent civil tax fraud proceeding." Gray (supra); see Klein v. Commissioner, 880 F. 2d 260, 262 (CA10 1989) (conviction under 7201 "collaterally estops a taxpayer from denying fraud [in a] civil tax case involving the same years").¹ This preclusive effect obtains, courts have explained, because " 'wilful' [tax evasion] includes all of the elements of fraud." Tomlinson v. Lefkowitz, 334 F. 2d 262, 265 (CA5 1964); see Gray, 708 F. 2d, at 246 ("The elements of criminal tax evasion and civil tax fraud are identical."); Moore v. United States, 360 F. 2d 353, 356 (CA4 1966) ("[W]hile the criminal evasion statute does not explicitly require a finding of fraud, the case-by-case process of construction of the civil [fraud] and criminal tax provisions has demonstrated that their constituent elements are identical.").

Tax offenses span a wide range, from failure to file a tax return, 26 U. S. C. §72O3, to the unauthorized use of tax stamps, §7209. But "the gravest of offenses against the revenues," this Court has said, the "capstone" of tax law violations, is tax evasion. Spies, 317 U. S., at 497, 499; see Boulware (supra). Tellingly, the Kawashimas pleaded guilty to a crime carrying a maximum prison term of three years, §7206; for tax evasion, the maximum term is five years, §7201. It is thus understandable that Congress would single out tax evasion, as it did in Clause (ii), specifically designating it, and no other tax crime, an "aggravated felony" for deportation purposes.

The Court ascribes a different purpose to Clause (ii). Tax evasion, made criminal by §7201, the Court states, "almost invariably," but "not necessarily[,] involve[s] fraud or deceit." Ante, at 10. But see supra, at 4 and this page. Congress likely included Clause (ii), the Court suggests, simply "to remove any doubt that tax evasion qualifies as an aggravated felony." Ante, at 8. In other words, in holding that Clause (i) includes tax offenses, the Court finds Clause (ii) largely, but not totally, redundant.

In support of the notion that tax evasion can occur without fraud or deceit, the Court cites United States v. Scharton, 285 U. S. 518 (1932); see ante, at 9. In that long-obsolete case, the Court rejected the Government's plea for the application of an extended limitation period to a prosecution for tax evasion. The generally applicable statute of limitations was three years; for tax offenses that involve defrauding the United States, however, the limitation period was six years. An averment of intent to defraud, the Court said in Scharton, would be "surplusage," for it would suffice "to plead and prove a wilful attempt to evade or defeat." 285 U. S., at 521.

Courts had limited Scharton to its statute of limitations context several decades before Congress enacted §1101(a)(43)(M) in 1994. See Tseung Chu v. Cornell, 247 F. 2d 929, 936, n. 6 (CA9 1957) (distinguishing Scharton and holding that tax evasion is a crime of moral turpitude because it entails fraud); Lefkowitz, 334 F. 2d, at 265 (distinguishing Scharton and holding that tax evasion necessarily involves fraud). Moreover, Congress, since 1954, has expressly prescribed a six-year limitation period for tax evasion. See 26 U. S. C. §6531(2). In short, Scharton is a cryptic, thinly reasoned opinion, one that did not influence subsequent federal-court description of the crime of tax evasion. The suggestion that Congress may have worried about Scharton when framing legislation over 60 years later is hardly credible.

The Court presents another reason, drawn from the Government's brief, why Congress may have treated tax evasion discretely, while embracing tax crimes generally within the Clause (i) category. Section 7201 covers both evasion of assessment and evasion of payment. Imagine a taxpayer who files a truthful return, then moves her assets to a place "beyond the reach of the Internal Revenue Service." Ante, at 10; see Brief for Respondent 34. The Court acknowledges that evasion-of-payment cases almost always "involve some affirmative acts of fraud or deceit." Ante, at 10. Still, there may be a rare case in which that is not so. Rare, indeed; imaginary would be an apt characterization. The Government conceded that, to its knowledge, there have been no actual instances of indictments for tax evasion unaccompanied by any act of fraud or deceit. Tr. of Oral Arg. 30-31.

The canon that statutes should be interpreted to avoid superfluity cannot be skirted as easily as the Government here urges. We have declined to interpret legislation in a way that "would in practical effect render [a provision] entirely superfluous in all but the most unusual circumstances." TRW Inc. v. Andrews, 534 U. S. 19, 29 (2001). It is hardly sufficient for the Government to hypothesize a case in which the provision might have some independent role. See id., at 30. Where, as here, "the Government concede[s] that the independent function one could attribute to the [provision] would [rarely] arise," a construction moored to a case "most unlikely" to exist should be rejected. Id., at 31. It is highly improbable that "a proviso accounting for more than half of [the] text" of §1101(a)(43)(M), i.e., Clause (ii), "would lie dormant in all but the most unlikely situations." See 534 U. S., at 31.

Congress' aim in drafting §11O1(a)(43) was to determine which crimes are sufficiently serious to warrant the "drastic measure" of deportation, and which are not. See Fong Haw Tan, 333 U. S., at 10. It is implausible that Congress, when drafting §1101(a)(43)(M), intended to address, or was even aware of, the Government's scenario: a taxpayer who files a truthful return, then, to thwart collection of the tax due, moves all her assets offshore. Far more likely, Congress did not intend to include tax offenses in §1101(a)(43)(M)(i), but instead drafted that provision to address fraudulent schemes against private victims, then added §1101(a)(43)(M)(ii) so that the "capstone" tax offense against the Government also qualified as an aggravated felony. See supra, at 5.

B

The Court's construction of the statute is even less plausible given the numerous offenses it would rank as "aggravated felon[ies]." Many federal tax offenses, like 26 U. S. C. §7206, involve false statements or misleading conduct. See, e.g., §7202 (failing to truthfully account for and pay taxes owed). Conviction of any of these offenses, if the Court's construction were correct, would render an alien deportable. So would conviction of state and local tax offenses involving false statements. Ferreira v. Ashcroft, 390 F. 3d 1091, 1096-1097 (CA9 2004) (state-law offenses qualify as offenses involving fraud or deceit under 8 U. S. C. §1101(a)(43)(M)); see, e.g., Del. Code Ann., Tit. 30, §574 (2009) (submitting a tax return false as to any material matter is a criminal offense); D. C. Code §47-4106 (2001-2005) (same); Ala. Code §40-29-114 (2003) (same); Va. Code Ann. §58.1-1815 (2009) (wilfully failing to account truthfully for and pay certain taxes is a criminal offense).

Rendering all tax offenses involving false statements "aggravated felon[ies]" that subject an alien to deportation is all the more problematic, for many of these offenses are misdemeanors. Among federal misdemeanors, see, e.g., 26 U. S. C. §7204 ("furnish[ing] a false" W-2 form to an employee); §7205 ("suppl[ying] false or fraudulent information" to an employer); §7207 (filing a return "known . . . to be false as to any material matter"). On the state and local level, see, e.g., Cal. Rev. & Tax. Code Ann. §1610.4 (West 1998) ("Every person who wilfully states anything which he knows to be false in any oral or written statement, not under oath, required or authorized to be made as the basis of an application to reduce any tax or assessment, is guilty of a misdemeanor."); N. D. Cent. Code Ann. §57-37.116 (Lexis 2O11) ("Every person who wilfully and knowingly subscribes or makes any false statement of facts [on an estate tax return] . . . is guilty of a class A misdemeanor."); Columbus, Ohio City Code §§361.31(a)(4), (b), (d) (2009) (any person who "knowingly make[s] and file[s] an incomplete, false or fraudulent [municipal] return" is guilty of a fourth-degree misdemeanor). Nor would the $10,000 threshold set in 8 U. S. C. §1101(a)(43)(M) prevent deportation for tax crimes far less serious than wilful tax evasion, for as many as six years may be included in the amount-of-loss calculation. See 26 U. S. C. §6531 (setting a six-year statute of limitations for, inter alia, tax crimes involving fraud or falsity); Brief for Johnnie M. Walters as Amicus Curiae 15-16 (hereinafter Walters Brief).²

Finally, the Court's decision has adverse consequences for the efficient handling of tax prosecutions. It is often easier for the Government to obtain a conviction under §7206 (false statements) than under §7201 (tax evasion). See United States v. Olgin, 745 F. 2d 263, 272 (CA3 1984) (unlike a conviction under §7201, a conviction under §7206 does not require proof of a tax deficiency); Considine, 683 F. 2d, at 1287 (unlike a conviction under §7201, a conviction under §72O6 does not require proof of an attempt to escape a tax). For this reason, the Government has allowed taxpayers to plead guilty to a §7206 charge in lieu of going to trial under §7201 on an evasion charge. See Walters Brief 19-20. Deportation consequences are important to aliens facing criminal charges. See Padilla v. Kentucky, 559 U. S.,_ _ (2010) (slip op., at 10) ("[P]reserving the client's right to remain in the United States may be more important to the client than any potential jail sentence." (quoting St. Cyr, 533 U. S., at 322)). If a §7206 charge carries the same prospect of deportation as a §7201 charge, then an alien's incentive to plead guilty to any tax offense is significantly reduced.

** ** **

For the reasons stated, I would hold that making a material, false statement on a tax return does not qualify as an aggravated felony within the compass of 8 U. S. C. §1101(a)(43)(M)(i). I would therefore reverse the judgment of the Court of Appeals for the Ninth Circuit.

■■

____________

*In favour of respondent.

  1.  See also, e.g., Blohm v. Commissioner, 994 F. 2d 1542, 1554 (CA11 1993); Fontneau v. United States, 654 F. 2d 8, 10 (CA1 1981) (per curiam); Plunkett v. Commissioner, 465 F. 2d 299, 307 (CA7 1972).

  2.  One might also ask what reason Congress would have for making a tax misdemeanor a deportable offense, while more serious crimes do not jeopardize an alien's residency in the United States. See, e.g., Leocal v. Ashcroft, 543 U. S. 1, 11–12 (2004) (driving while drunk, causing serious bodily injury to others is not an aggravated felony).