45838872 – successful business deal – real estate agent and new female homeowner exchanging house key while shaking hands over a contract of house sale.
While every tax controversy and every tax matter is different, there are generally two critical stages in a pre-indictment process where positioning oneself to participate in a taxpayer conference can be substantively or procedurally advantageous. The first time is at the conclusion of the CID investigation when the special agent has prepared his or her SAR. The second is at or just prior to referral to the Department of Justice (DOJ) Tax Division. While entering into these conferences can improve the potential outcomes the taxpayer may face, an improper handling that reveals defenses too early in the process or results in inadvertent disclosures can exacerbate the situation. These processes and steps should only be engaged in with the careful guidance of an experienced tax attorney.
As for the CID investigation, a pre-indictment conference request is granted as a matter of course because it is believed to be in the government’s best interest. However, if the conference is not in the government’s best interest or if the taxpayer is subject to a grand jury investigation it may not be held. If a pre-trial conference is held, the taxpayer is permitted to attend but, practically, it may be better for only the attorney to appear. If the taxpayer must attend the conference he or she should not engage in conversation beyond initial & closing pleasantries. Furthermore steps to avoid non-verbal communications should also be taken. The taxpayer must be told of the conference results.
The attorney will probably also wish to position the client to receive a conference at the DOJ Tax Division. These conferences are also routinely granted, but the taxpayer does not have a right to receive one. Therefore a defense attorney must take steps on the taxpayer’s behalf to increase the odds that said conference will occur. The government will not delay action to hold a conference if a showing that information will be useful to a prosecutorial decision is not made. If the taxpayer is informed of the fact that he or she will be referred to DOJ’s Tax Division for criminal prosecution, then the attorney will apply for or re-request a conference as quickly as possible.
At any DOJ Tax Division hearing, the taxpayer’s council will have the opportunity to present evidence or explanations regarding the alleged tax crimes and potential indictment. The conference is not an appropriate venue or time to examine the government’s evidence, but rather it gives the taxpayer a chance to present any important materials before the government authorizes a prosecution. If the taxpayer attends the conference special care must be taken because the government may use any statements made by the taxpayer at the conference in future proceedings.
However if the taxpayer is unaware about his or her status regarding a criminal referral the timing is more difficult. However, most tax defense attorneys would probably recommend a belt and suspenders approach here by requesting a conference. If the taxpayer does then face a CI referral he or she will already be best positioned to engage in a pre-indictment conference.
