In Kawashima v. Holder, 132 S.Ct. 1166 (Feb. 21, 2012), the Supreme Court held that federal convictions of willfully making a false tax return, in violation of 26 U.S.C. 7206(a), and aiding and assisting in the preparation of a false tax return, under 26 U.S.C. 7206(2), constituted fraud offense aggravated felonies, under INA 101(a)(43)(M)(i), 8 U.S.C. 1101(a)(43)(M)(i). Justice Thomas, writing for a six-member majority, held that those two offenses did involv[e] fraud or deceit, as required by (M)(i), and also rejected the argument that Congress action in specifically listing other tax evasion offenses, under 26 U.S.C. 7201, as aggravated felonies under INA 101(a)(43)(M)(ii), 8 U.S.C. 1101(a)(43)(M)(ii), meant that Congress did not mean for tax offenses that were not listed in (M)(ii) to be considered as aggravated felonies. Justice Ginsburg filed a dissenting opinion, in which Justices Breyer and Kagan joined.

In doing so, the court specifically reaffirmed the categorical analysis that looks to the elements of the offense, rather than to the underlying facts of the offense, to determine whether the offense of conviction falls within the boundaries of the fraud or deceit offense portion of the conviction-based ground of removal.

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 v. Duenas"Alvarez, 549 U.S. 183, 186, 127 S.Ct. 815, 166 L.Ed.2d 683 (2007) (applying the approach set forth in Taylor v. United States, 495 U.S. 575, 599"600, 110 S.Ct. 2143, 109 L.Ed.2d 607 (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.

(Id. at 1172 [footnote omitted].) The court made it clear that it was here considering only the fraud or deceit offense portion of this aggravated felony, rather than the loss requirement. (Id. at n.3.)

The court reasoned that an offense could fall within the fraud or deceit aggravated felony definition, even though fraud or deceit themselves were not formal elements of the offense:

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.

(Id. at 1172.) The courts general test for whether the conviction was for an offense involving fraud or deceit was whether it was an offense with elements that necessarily entail fraudulent or deceitful conduct. (Id. [emphasis supplied].)

In this context, therefore, the court interpreted the word involve to mean possess formal elements that necessarily entail fraudulent or deceitful conduct.

Addressing Mr. Kawashimas conviction of willfully making a false tax return, in violation of 26 U.S.C. 7206(a), the court stated:

When subparagraph (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 willfully submitted a tax return that was false as to a material matter. He therefore committed a felony that involved deceit.

(Id. at 1172.)

The same analysis leads to the same conclusion with respect to the similar offense committed by Mrs. Kawashima: aiding and assisting in the preparation of a false tax return, under 26 U.S.C. 7206(2):

We conclude that Mrs. Kawashima's conviction establishes that, by knowingly and willfully assisting her husband's filing of a materially false tax return, Mrs. Kawashima also committed a felony that involved deceit.

(Id. at 1173.)

The court also rejected the argument that the specific listing of one tax evation offense in (M)(ii) indicated a congressional intent to exclude other tax evastion offenses from (M)(i), because otherwise (M)(ii) would be add nothing to the law. In doing so, the court reasoned:

Moreover, 7201 includes two offenses: the offense of willfully attempting to evade or defeat the assessment of a tax as well as the offense of willfully attempting to evade or defeat the payment of a tax. Sansone v. United States, 380 U.S. 343, 354, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965) (emphasis in original). As the Government notes, it is possible to willfully 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.

(Id. at 1175.) The court thus provides an excellent example of an argument that a given offense does not necessarily involve fraud or deceit, because it can be committed by other means: it is possible to willfully evade or defeat payment of a tax without making any misrepresentation. (Ibid.)

Justice Ginsburg, joined by Justices Breyer and Kagan, dissented. She summarized her reasoning as follows:

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.

(Id. at 1176.)