Tax Fraud and Consequences:  Who Got Sentenced for What in 2017?

tax fraudA recently released report looks at tax fraud convictions in the United States in 2017.

 

Created by the Sentencing Reform Act of 1984, the U.S. Sentencing Commission is an agency within the judicial branch of the US government.  The independent agency is charged with creating and reporting on federal sentencing guidelines, among other responsibilities.

 

In June, the Commission released its 2017 report on tax fraud offenses in the US.  Our law firm focuses on the strategic defense of high asset and corporate persons and entities with complicated tax scenarios, or who have engaged in activities that may make them the subject of an IRS audit or criminal investigation

 

The 2017 report from the U.S. Sentencing Commission offers an interesting profile in both tax crime and offenders, among other metrics.  Here are findings from the report:

 

Who

 

  • In the US, there were 584 persons convicted and sentenced for tax fraud. In the past five years, the number of people convicted has decreased from 667 in 2013.  As the budget for the IRS has tightened in recent years, enforcement has declined.  Despite that, the IRS maintains a robust pursuit of high price tag tax fraud involving offshore tax issues, FBAR, and FATCA violations.

 

  • The average age of someone convicted on a criminal tax matter is 52, and offenders are more likely to be White, followed by Black and Hispanic.

 

  • Two-thirds of those convicted of tax fraud are men and more than 90 percent of offenders are US citizens.

 

What

 

  • Just under 90 percent of tax fraud convictions in the US involve a tax loss of $1.5 million or less. The median tax loss for 2017 was $277, 576.

 

  • Under federal sentencing guidelines, there are a number of conditions which amplify the sentences received by convicted tax offenders. Those conditions include the use of “sophisticated means to conceal” or carry out offenses, taking a leadership role in a crime, abusing a position of public trust, and obstructing justice.  Similarly, sentences were reduced for offenders who played a minor or marginal role in a tax crime.

 

Consequences

 

  • The average sentence was 17 months in prison. During each year of the past five, about 25 percent of tax offenders received a sentence below the sentencing guidelines.

 

  • Top US districts for tax offenders include (in order) the Northern District of Illinois, Northern and then the Eastern and Central District of California, and the Eastern District of New York.

 

Seventeen months may not look like much on paper, but it contains career downfall, ruined personal and professional standing, and loss of liberty.

 

Despite reduced federal financial support, the IRS continues to pursue individuals and organizations involved in tax controversy.  It is never too soon to speak with an experienced tax attorney if you are aware of tax irregularities in your returns, management of foreign bank accounts, or other tax concerns.

 

Knowledgeable tax attorneys serving local, national, and international tax clients

 

In Cleveland, Chicago, and internationally, Robert J. Fedor, Esq., LLC delivers decisive strategies and legal options for persons or entities facing a civil tax audit, allegations of tax crime, or other tax challenge.  Contact us or call 800-579-0997 today.

 

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