From the Tax Law Offices of David W. Klasing - If you are Faced with Plea Bargaining Related to a Federal Tax Crime, it is Probably Too Late to Keep you From Doing Jail Time!

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Tax Law Offices of David W. Klasing, PC

Mar 16, 2023, 06:37 ET

IRVINE, Calif., March 16, 2023 /PRNewswire/ -- 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.

Why you should use an Attorney to represent you in an audit

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.

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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]

SOURCE Tax Law Offices of David W. Klasing, PC