Treasury Enforcement Agent Exam Criminal Law & Federal Statutes 2 — Questions and Answers
Question 1: Which federal statute specifically criminalizes willfully making and signing a false tax return under penalty of perjury?
- 26 U.S.C. § 7201
- 26 U.S.C. § 7203
- 26 U.S.C. § 7206 (Correct answer)
- 26 U.S.C. § 7207
Correct answer: 26 U.S.C. § 7206
26 U.S.C. § 7206 criminalizes willfully making, subscribing, or presenting a false or fraudulent statement in a tax return or document under penalty of perjury.
Question 2: What is the maximum penalty for conspiracy to defraud the United States under 18 U.S.C. § 371?
- 2 years imprisonment
- 3 years imprisonment
- 5 years imprisonment (Correct answer)
- 10 years imprisonment
Correct answer: 5 years imprisonment
Conspiracy to defraud the United States under 18 U.S.C. § 371 carries a maximum penalty of 5 years imprisonment per count.
Question 3: Under the Bank Secrecy Act, which U.S. persons are required to file a Foreign Bank Account Report (FBAR)?
- Only U.S. corporations with foreign subsidiaries
- U.S. persons with aggregate foreign financial account balances exceeding $10,000 at any point during the year (Correct answer)
- All U.S. citizens residing abroad regardless of account balances
- Any person who conducts international wire transfers
Correct answer: U.S. persons with aggregate foreign financial account balances exceeding $10,000 at any point during the year
Any U.S. person (citizen, resident, or entity) whose foreign financial accounts have an aggregate value exceeding $10,000 at any time during the calendar year must file an FBAR with FinCEN.
Question 4: The 'willful blindness' (or 'deliberate ignorance') doctrine allows federal prosecutors to establish what?
- That a defendant acted with mere negligence
- That a defendant intentionally avoided learning incriminating facts in order to claim ignorance (Correct answer)
- That a defendant's tax preparer is criminally responsible instead
- That a defendant reasonably relied on professional advice
Correct answer: That a defendant intentionally avoided learning incriminating facts in order to claim ignorance
Willful blindness holds that defendants cannot escape criminal liability by deliberately avoiding knowledge of facts that would establish their guilt, treating deliberate ignorance as equivalent to actual knowledge.
Question 5: IRS Criminal Investigation (CI) special agents derive their primary statutory investigative authority from which law?
- The Revenue Act of 1918
- The Internal Revenue Code (Title 26, U.S.C.) (Correct answer)
- The Bank Secrecy Act (Title 31, U.S.C.)
- The USA PATRIOT Act
Correct answer: The Internal Revenue Code (Title 26, U.S.C.)
IRS Criminal Investigation agents derive their primary authority from Title 26 (the Internal Revenue Code), which defines federal tax crimes and grants CI agents law enforcement powers.
Question 6: To obtain a conviction under 18 U.S.C. § 1956 (money laundering), prosecutors must prove the defendant had knowledge of what?
- The exact dollar amount of proceeds being laundered
- That the property represented proceeds of a specified unlawful activity (Correct answer)
- The identity of all co-conspirators in the scheme
- That the transaction exceeded a specific reporting threshold
Correct answer: That the property represented proceeds of a specified unlawful activity
A key element of § 1956 money laundering is that the defendant knew the property involved represented proceeds of some form of unlawful activity, even if they did not know the specific predicate crime.
Question 7: A 'Klein conspiracy' in federal tax law refers to a conspiracy to do what?
- Evade taxes through a network of offshore shell companies
- Impair and impede the IRS in its lawful function of ascertaining and collecting taxes (Correct answer)
- Launder tax refund proceeds through structured deposits
- Bribe multiple tax preparers to file fraudulent returns
Correct answer: Impair and impede the IRS in its lawful function of ascertaining and collecting taxes
A Klein conspiracy (named from United States v. Klein) is a charge under 18 U.S.C. § 371 for conspiring to defraud the United States by obstructing the IRS's functions, even without a separately charged tax evasion count.
Treasury Enforcement Agent Exam Criminal Law & Federal Statutes 2
Which federal statute specifically criminalizes willfully making and signing a false tax return under penalty of perjury?