Many defendants who are charged with Federal tax crimes will ultimately enter into plea bargain agreements. According to an article by Allen Ellis and Mark H. Allenbaugh, 97% of all federal tax crime defendants plead guilty. This is not surprising when the IRS Criminal Investigation division has a 98% conviction rate.
Generally, Criminal Tax Defense Attorneys have defendants plead guilty in a last-ditch effort to avoid facing tremendously more severe criminal tax penalties stemming from a potential criminal tax conviction at trial. It is not uncommon for the Income Tax Division of the U.S. Attorney’s office to hang 30+ years of jail time over a defendant and plea bargain down the jail time to 2 years or so if the defendant will simply save the government the time, effort, expense and headache of going to trial in order to convict the defendant beyond a reasonable doubt.
By way of example, I represented a tax preparer that was facing over 80 years of threatened & warranted jail time and I successfully plea bargained the jail time down to less than 1 year and a day. Of course, I believed the government would eventually prevail in obtaining a conviction at trial because of the overwhelming evidence they had gathered and shared with me, or I would not have advised to plea bargain in the first place.
Defendants can enter open pleas or negotiated plea agreements. The question of whether you should plea bargain or commit to an open plea is something you should discuss with our dually licensed Criminal Tax Defense Attorneys & CPAs. Each case is unique. However, Ellis and Allenbaugh have concluded through their research that, on average, defendants who enter into open pleas receive lower sentences.
If you are considering whether you should plead guilty to a federal tax crime, you should connect with our experienced Dual Licensed Criminal Tax Defense Attorneys and CPAs. Our legal team at the Tax Law Offices of David W. Klasing can evaluate your criminal tax case and explain the appropriate course of action. Call us today by dialing (800) 681-1295 or clicking on this link to schedule a reduced rate initial consultation online.
Of course, we have the best opportunity and highest probability of preventing a criminal tax conviction in the first place when you bring us into your high-risk tax matter as early in the process as possible. To date we have only had one client ultimately serve jail time and a high percentage of our client’s have had real world exposure to being charged with a tax crime for their actions before engaging us. Many of our client’s that have faced this exposure have stayed with us long term to avoid having similar problems in the future.
How Our Dual Licensed Tax Attorneys & CPAs Can Help You Avoid a Criminal Tax Conviction in the First Place.
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!
Considering Open Pleas vs. Negotiated Plea Agreements for Federal Tax Crimes
If you are at risk of being charged with a federal tax crime, you might ultimately have to decide whether or not to plead guilty. There are four ways that you may enter into a guilty plea:
- Through an oral or written plea agreement that may bind the court to a recommendation for sentencing
- Through a written conditional plea that preserves your chances to appeal adverse pretrial evidentiary rulings
- Through a plea of no contest
- Through an “open” or “straight up” plea to an indictment
According to an article written by Allan Ellis and Mark H. Allenbaugh, approximately 97% of all federal defendants plead guilty. In doing so, the accused may generally avoid more serious penalties that could accompany their conviction at trial.
If you enter into an “open” or “straight up” plea agreement, you will plead guilty without any promise from the prosecution as to what your sentence should be. You may wish to enter into an open plea agreement in hopes that you will receive a lighter sentence than was proposed by the prosecution.
If you enter into a negotiated plea agreement, it means that you have reached an agreement with the prosecutor concerning your sentence. Typically, in a plea bargain, you will plead guilty to one or more of the charges you are facing. In exchange, you will receive a lighter sentence.
Entering into a plea bargain to reduce the counts of conviction may not affect your sentence. For federal tax crimes, sentencing guidelines are typically calculated by analyzing defendants’ “relevant conduct.” Relevant conduct is the range of conduct used to determine an applicable offense level. Defendants who enter into open plea agreements typically are not required to admit any relevant conduct. Instead, those who enter into open pleas will preserve their right to challenge all relevant conduct as it applies to sentencing factors.
Therefore, Ellis and Allenbaugh have concluded that, on average, defendants who enter into open pleas have received lower sentences. Still, if you are at risk of being charged with a federal tax crime, you should consult with our experienced Dual Licensed Criminal Tax Defense Attorneys and CPAs as early as possible & well before being forced to decide how to plead or entering a proffer agreement and avoid criminal tax prosecution all together where possible.
How Long Do You Go to Jail for Tax Evasion?
Many tax crimes do not result in jail time. If you simply made a mistake when filing your tax returns, then it is unlikely you will face criminal tax penalties. However, if it is determined that you intentionally evaded your federal tax obligations, you may face time in federal prison.
In general, those who create larger amounts of tax loss for the government will face longer prison sentences. The amount of tax loss is the amount of taxes the defendant failed to pay through their illegal actions. However, many other factors may be analyzed when determining a prison sentence for a tax crime. For instance, a defendant’s criminal record may factor into establishing their prison sentence.
If you are worried that you may go to jail for tax evasion or other tax crime, you can contact our Dual Licensed Tax Defense Attorneys and CPAs for help with your case. Our legal team can help resolve any civil or criminal tax issues you are facing.
What Are the Potential Defenses to Tax Evasion?
If you are at risk of being charged with tax evasion, our defense counsel may effectively utilize several potential available defenses. During an assessment of your case, our Dual Licensed Tax Defense Attorneys and CPAs can help determine if any of the following defenses may apply:
Non-Taxable Source
You may defend against tax evasion charges by arguing that the money at issue came from a non-taxable source. For example, you may innocently obtain tax-free funds through loans, inheritances, or gifts.
Honest Mistake
Furthermore, a common defense to tax fraud is the assertion that the accused made an honest mistake. Theoretically, only intentional avoidance of your tax obligations can result in criminal tax penalties. If we can establish that your tax evasion stems from an honest mistake, you will not be convicted of a crime. Our Dual Licensed Tax Defense Attorneys and CPAs can help gather evidence to prove that an error on your tax returns occurred because of an honest mistake.
Living Off Cash
Federal laws do not prohibit you from holding cash in your home as opposed to storing it in a bank. If the Internal Revenue Service (IRS) uses expenditures, net worth methods, or bank deposits as ways of proving tax fraud in your case, then we can potentially defend you by asserting that you were living off of stored cash funds. However, the IRS is generally suspicious of those who hoard large amounts of cash. You can consult with our Dual Licensed Tax Defense Attorneys and CPAs for help deciding if you should mount this defense in your case.
Those Who Are at Risk of Being Charged with Tax Crimes Can Call Our Law Firm for Support
If you are at risk of being charged with a tax crime, seek assistance from our experienced Dual Licensed Tax Defense Attorneys and CPAs. Contact our team at the Tax Law Offices of David W. Klasing today by calling (800) 681-1295 or clicking on this link to schedule a reduced rate initial consultation online.
More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90-Day Letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRStaxauditor’sss findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What if I don’t respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- 5 Ways to Respond to Tax Evasion Charges
- Being audited after using a tax professional
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
- Tactics to defend or mitigate IRS criminal tax charges
- How the IRS generates leads about suspected tax crimes
- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegation
Questions and Answers on Unfiled Back Taxes
- What are the common issues that non-filers face?
- Risk of audit after filing delinquent prior year returns
- Can substitute return deficiency be discharge in bankruptcy
- Substitute return modified by subsequent delinquent return?
- Do I file every delinquent return for each missing year?
- How does the IRS identify non-filers?
- How important is it to the government that I didn’t file?
- Delinquent tax return criminal prosecution likelihood
- Will I get a refund on a delinquent tax year?
- What happens after enforcement action has begun?
- Should I use an attorney, EA or a CPA to represent me when I re-enter the tax system?
- Why do people drop out of the tax system?
- What happens after the IRS identifies me as a non-filer?
- IRS has not previously filed substitute returns
- Tax attorney representation when re-entering tax system
- How will the government force me to file returns?
- What penalties can IRS impose on delinquent tax filings?
- What should I do to re-enter the tax system?
- Can Law Office of David W. Klasing help me re-enter system?
- Will tax collection taken by authorities affect my credit
- I concealed bank accounts from the government
- Forgetting or failing to file tax return
