The entire restitution is assessable because the Title 18 conspiracy count includes all the conduct in the Title 26 false-return count (not a Westbrooks case)

Plain-English summary

Under section 6201(a)(4), the IRS can assess court-ordered criminal restitution for a Title 26 tax as if it were a tax, but only when it was ordered as an independent part of the sentence rather than solely as a condition of supervised release (the "Westbrooks" question). This Chief Counsel email advises that the entire restitution here is not subject to the Westbrooks limitations. The defendant was convicted of a Title 18 conspiracy to defraud the United States and a Title 26 count of aiding and abetting the filing of a false return. The overt acts of the conspiracy included causing understated gross receipts and the filing of the same false returns, so the Title 18 conspiracy count includes all the conduct of the Title 26 count. All the restitution was therefore for conduct covered by the Title 18 count and is assessable.

Ruling snapshot

• Question: Is the ordered restitution assessable, or is this a "Westbrooks" case?
• Outcome: Advice given (not a Westbrooks case; entire restitution assessable)
• Key authorities: IRC § 6201(a)(4); United States v. Westbrooks

Full text (IRS public release)

ID: CCA_2020072214550544
UILC: 6201.01-06

Number: 202141012
Release Date: 10/15/2021
From: ----------------------
Sent: Wednesday, July 22, 2020 2:55:05 PM
To: ------------
Cc: ---------------------------------------------------------------
Bcc:
Subject: RE: Potential Westbrooks case-------

The entire amount of restitution ordered in this case with respect to ------ is not subject
to the Westbrooks limitations on assessment and collection. The defendant was
convicted on two counts set forth in the indictment: Count -- was for conspiracy to
commit tax fraud, and Count -- was for aiding and abetting the filing of a false return for
----------------------, for ------- in -------.

The conduct alleged in Count -- was that ------ and others conspired, starting in -------
and continuing up to the date of the indictment in -------, to defraud the United States “for
the purpose of impeding, impairing, obstructing, and defeating the lawful functions of the
IRS in the ascertainment, computation, assessment, and collection of the revenue,
[including] . . . corporate income taxes.” The actions by which ------ and the co-
conspirators were alleged to have carried out the conspiracy included:

•    causing adjustments to be made to the books and records of ----------------------- to understate
     gross receipts (indictment paragraph -------), and
•    preparing and filing, and causing to be prepared and filed, false and fraudulent returns for,
     among others, ----------------------- (indictment paragraph -------).

----------------------, is one of ----------------------. Thus Count -- includes all of the conduct
alleged in Count --: Count -- includes causing ---------------------- to understate gross
income and file false returns, and Count -- was for causing ------------------------------- to
file a false return by understating gross income. So all of the restitution imposed in the
judgment was for conduct covered by the Title 18 count (Count --). It is, therefore, not
subject to the Westbrooks limitations.

Please call if you have further questions about this matter.