Accounting
Archeologists uncover ancient Roman tax fraud case in desert
Archeologists have uncovered a set of court documents for an ancient Roman tax fraud and forgery case in the then-province of Judea connected to sham transactions involving the sale and manumission of slaves.
More specifically, they discovered and translated a Greek papyrus that was found to be a memorandum for a judicial hearing before a Roman official during the reign of Hadrian, after the emperor’s visit to the region in 129/130 CE and before the outbreak of the Bar Kokhba revolt in 132, said the
The archeologists note that the condition of the scroll means many details remain unknown, such as the precise location of the trial or the citizenship status of the defendants. One thing they do know, however, is that the case had two main defendants: one man named Gadalias and another named Saulos, who both stood accused of corrupt dealings.
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Gadalias was the son of a notary and archival official “and therefore presumably belonged to the officeholding class of his community.” The scroll characterized him as a corrupt individual who was known to the authorities as having a history of violence, extortion, counterfeiting, and inciting rebellion. For instance, the text mentions a previous hearing before a Roman official named Postumus during which a document presented by Gadalias was found to have been forged or manipulated.
Meanwhile, Saulos was named as a friend of Gadalias and his partner-in-crime, though it seems little else about his background was mentioned. However, he is believed to have been the prime instigator of the scheme. While Gadalias is better known, the authors believe “his role in the events seems to have been limited to facilitating the manipulation of documents by virtue of his position as the son of the local chreophylax” (a kind of financial official).
The scheme
The archeologists, once again noting that many details are missing, said their best interpretation of the accusation is that Saulos approached an associate named Chaereas, who owed him money. Saulos apparently directed him to engage in a sham transaction where Chaereas paid to “buy” several of his slaves while retaining possession himself. Afterwards, the document says, Saulos and his father then freed these slaves in Chaereas’ name without paying the required taxes.
The scholars aren’t entirely clear on what fee was evaded. They theorize it could have been a 4% tax on direct slave sales, a 5% tax on manumission by Roman citizens, a poll tax that slave owners were obligated to pay on behalf of their slaves (ownership of slaves was a matter of official record and entered into census counts), a toll on imported slaves (up to 25% depending on province), or birth registration fees for houseborn slaves.
They’re also not entirely clear on why the scheme was enacted. The most likely explanation, they said, was that Saulos wanted to conceal his assets from the Roman government by nominally alienating his own slaves to Chaereas. By pretending to sell off his slaves or buying them without using his own name, Saulos may have sought to lower his recorded wealth in order to diminish his tax burden and evade the costly and time-consuming public service obligations imposed by the Roman state on persons above a certain wealth threshold. He may also have tried to avoid paying existing or expected debts or penalties to the state. The document itself describes similar types of schemes where individuals cheat their property assessment by, say, deliberately cutting down vines and trees or avoiding the registration of slaves in the census.
The authors believe Saulos may have been nominally selling off young slaves (who had never been entered into the census) before they entered the age of tax liability. The undeclared status of these slaves might explain how they got caught, as the registration of the sale could have been the first time ever a particular slave was reported to the provincial administration — this was at a time when it was customary to provide registered documentation of the slave’s previous ownership, as well as birth declarations and census returns demonstrating they had been properly declared with all taxes paid.
“If any documentation was missing or appeared dubious, this could have sparked an inquest by Roman fiscal officials that resulted in desperate attempts to manipulate or forge the necessary documents by Saulos and his collaborators,” said the paper.
The authors do offer another possible motive: Saulos was Jewish, which meant he had religious obligations regarding the treatment of slaves. He could have freed the slaves that were “bought” in order to possibly take advantage of a provision outlined in Leviticus (25:47–54) which states a Jewish slave sold to a non-Jewish owner must be redeemed by a fellow Jew, who then becomes his master; or because he simply wanted to free Jewish slaves but did not want to pay taxes on doing so. On this latter motivation, the authors said this could be because of obligations of Jews at the time to free Jewish slaves after seven years of service, or simply because they wanted to. However, the actual ethnicity of the slaves in question is not confirmed.
And what of the accused forger, Gadalias? The prosecutor expected he would say he knew nothing of the forgery, and that if the documents had been falsified, that was because of his father, who conveniently enough was already dead. However, even if that were the case, he would still be liable for simply presenting the false documents, as well as for the financial damage that resulted from the forgery. Despite his protestations of good faith, he was also accused of deliberately withholding documents from Roman authorities in the course of the investigation (essentially, obstruction).
“Ultimately, even if Gadalias could persuade the judge that he was acting in good faith and the dubious document was drafted under his father, financial damages due to the fiscus as a result of the fraud were still heritable by him on his father’s behalf,” said the paper.
Prosecutors apparently argued that the pair had been convicted previously for counterfeiting coins, which established both their history of criminal activity as well as the fact that, despite the attempted blame-shifting, they work together. They also mentioned Gadalias’ many other crimes.
The specific outcome of the hearing is unknown. However, the authors believe that the very fact that the document’s existence — as well as its discovery in a desert cave — indicates that the case was not closed.
“It may be argued that the very survival of [the papyrus] indicates that the case was not yet closed at the end of the hearing. It is remarkable that this record, which was per se of an ephemeral nature, was not only retained but also brought by its possessor to the caves of the Judaean desert during the Bar Kokhba rebellion. This testifies to the enduring importance of the document, and may be a sign that the case had not reached its conclusion,” said the paper.
The reconciliation bill passed by the House on May 22 is currently being considered by the Senate, and will likely undergo changes before approval by the upper chamber. To what extent the changes will create stumbling blocks before a final bill is produced and voted on is uncertain, with the increased SALT deduction, Medicaid reforms, and repeal of certain Inflation Reduction Act credits on the line.
While much can change between now and the final version of the bill, the following is a quick overview of some of the provisions:
- Bonus depreciation. First-year bonus depreciation, currently being phased down 20% per year since 2023, is 40% for 2025, and will drop to 0% in 2027. Under the One Big Beautiful Bill Act (or OBBBA) it will be reset at 100% for eligible property acquired and placed in service after Jan. 19, 2025, and before Jan. 1, 2030.
- Section 199A Qualified Business Income deduction. The QBI deduction, created by the Tax Cuts and Jobs Act, is available through 2025 to owners of pass-through entities, sole proprietors and the self-employed. The OBBBA would make the deduction permanent, and the deduction would increase to 23% for tax years beginning after 2025.
- Domestic research and experimental expenditures. The OBBBA would reinstate the deduction available to businesses that conduct research and experimentation. Expenses incurred after 2024 and before 2030 would be eligible.
- Section 179 expensing. The bill increases the limit to $2.5 million and increases the phaseout threshold to $4 million for property placed in service after 2024. The limit and threshold would be adjusted annually for inflation.
- Excess business loss limitation. The bill makes permanent the excess business loss limitation for pass-through entities.
- Pease limitation. The bill would make permanent the repeal of the Pease limitation on itemized deduction, but would introduce a new limitation for taxpayers in the 37% bracket for years after 2025. It would also temporarily increase the standard deduction for tax years 2025 through 2028.
- The Child Tax Credit. The bill makes the CTC permanent and raises it to $2,5000 per child for tax years 2025 through 2028, after which it would return to its present $2,000 with an annual inflation adjustment.
- Federal gift and estate tax exemption. The bill increases the federal gift and estate tax exemption to $15 million, and adjusts it annually for inflation. It is currently set at $13.99 million.
One sector the bill is very positive for is real estate, according to Tyler Davis, president of Saunders Real Estate: “It makes a lot of the TCJA provisions permanent. The estate tax exemption is made permanent and raised to $15 million, and the bonus is back to 100% for the next four years. This allows purchasers to depreciate their investments a lot faster, so it makes deals more attractive for investors and developers. A special provision for industrial manufacturing property under the bill, it is eligible for 100% expensing.”
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This would allow 100% of a project’s cost to be deducted in the first year, making it “hugely attractive,” he said. “The administration wants to bring investment back to the U.S. This will incentivize that process.”
Under the bill, the Section 163(j) business interest deduction would expand and allow more interest to be deducted on qualifying real estate, he said. “And they’re redoing some of the Opportunity Zone rules and boundaries, and are lowering reinvestment thresholds for investments. This should drive more investment into rural communities. And, lastly, there are no Section 1031 changes in the bill. That’s a really positive thing from a transactions and reinvestment perspective.”
Top 25 Firm WithumSmith+Brown acquired Pannel Kerr Forster of Texas on June 1, expanding its geographic reach into Texas and adding energy and oilfield expertise to its practice.
PKF Texas is an accounting, tax and business advisory firm headquartered in Houston. Its 20 partners and approximately 160 team members will join Withum’s roster but remain at their Houston office.
“Joining forces with Withum offers our valued clients and dedicated staff even greater opportunities to thrive and succeed,” Gary Voth, director and chairman of the board at PKF Texas, said in a
PKF Texas also strengthens Withum’s financial services, manufacturing, professional services, technology, private client services, client accounting and advisory services.
‘Uniting our firms enables us to grow a portfolio of energy and oilfield service businesses nationwide,” Patrick Walsh, Withum’s managing partner and CEO, said in a statement. “A piece of our M&A strategy aims to build around existing capabilities to create a more holistic client service approach. Diversity in expertise, experience and culture strengthens our ability to serve our clients and attract talent. Having a presence in the Space City offers us fantastic growth opportunities, and we’re excited to be here.”
Withum is based in Princeton, New Jersey, and reported $577 million in revenue in 2024. It has 25 offices, 226 partners and over 2,300 employees.
In April, Withum added
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