The following excerpt is from United States v. McGinn, No. 13-3164-cr (L), No. 13-3202(CON), No. 13-3477(XAP), No. 13-3544(XAP) (2nd Cir. 2015):
Essentially, the government contended that a series of advances to the defendants were not loans but income. The defendants argued that the advances were, in fact, loans, but that, in any event, the government's evidence was insufficient to prove that they acted willfully and knowingly. Section 7206(1) requires the government to prove: (1) that the defendant made or caused to be made an income tax return for the relevant year, which he verified was true; (2) that the tax return was false as to something material; (3) that the defendant willfully signed the return knowing it was false; and (4) that the return stated that it was made under penalty of perjury. United States v. LaSpina, 299 F.3d 165, 179 (2d Cir. 2002). While a taxpayer is not ordinarily required to report a loan as income, he must do so if he does not intend to repay the loan. See United States v. Rosenthal, 470 F.2d 837, 841 (2d Cir. 1972).
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