Sunday, October 29, 2017

Sentencing Commission Quick Facts on Sentencing for Tax Crimes (10/29/17)

I am working up a more detailed analysis of the Government's recently disclosed Eureka moment for the proper Sentencing Guidelines calculations for FBAR crimes of conviction.  See Another FBAR Plea And Notice of Government Change of Position on Applicable Guidelines (Federal Tax Crimes Blog 10/27/17), here.  I won't have that done until the 2017 version of the Guidelines are posted on the web so that I can link them. (Having given my excuse for waiting on the 2017 Guidelines, I have to say that I am pretty sure that the new Guidelines will not differ in any material respect from the prior versions of the Guidelines; still since the 2017 Guidelines should be posted in the next few days, I will just wait and provide links to the new Guidelines,)

In the meantime, while poking around the Sentencing Commissioner web site, here, I came across a recent Sentencing Commission posting on Quick Facts for Tax Fraud Offenses, here.  The posting is short (two pages), so I encourage readers to review the entire posting.  Here are some facts stats that I found interesting:

  • 584 cases reported in fye 2016 involved tax fraud.  Tax fraud offenses include cases with complete guideline application information in which the offender was sentenced under §2T1.1 (Tax Evasion; Willful Failure to File Return, Supply Information, or Pay Tax; Fraudulent or False Returns, Statements, or Other Documents) or §2T1.4 Aiding, Assisting, Procuring, Counseling, or Advising Tax Fraud) using a Guidelines Manual in effect on November 1, 2001 or later.  (JAT Note:  I think that the defraud / Klein conspiracy (18 USC 371) cases are sentenced under §2T1.9 but,  since §2T1.9 refers to §2T1.1, I suspect that the defraud / Klein conspiracy are included in the §2T1.1 number.)
  • The majority of tax fraud offenders had little or no prior criminal history (80.0% of these offenders were assigned to Criminal History Category I).  
  • The median tax loss for these offenses was $218,035.
  • 90.7% of tax offenses involved tax losses of $1.5 million or less.
  • 25.9% of tax offenses involved tax losses of $100,000 or less.
  • The majority of tax fraud offenders had little or no prior criminal history (80.0% of these offenders were assigned to Criminal History Category I).
  • 90.7% of tax offenses involved tax losses of $1.5 million or less.
  • Sentences for tax fraud offenders were increased for 11.0% of offenders for using sophisticated means to execute or conceal the offense. [I think the myth among practitioners is that the sophisticated means adjustment is routine, so this number is not consistent with the myth.]
  • Nearly two-thirds of tax fraud offenders were sentenced to imprisonment (63.9%).
  • The average sentence length for tax fraud offenders was 15 months.  [As I have observed before, the average length for offshore related convictions is less, but I don't have the statistics for that; message, if you want to cheat on tax, use offshore accounts.]
Sentences Relative to the Guideline Range - I encourage readers to look at the reported statistics on within Guidelines ranges, below Guidelines sentences because of substantial assistance, other Government sponsored departures, and non-Government sponsored departures. 

The following are interesting for the past 5 years:

  • The average guideline minimum ranged between 24 months and 26 months during that time period;
  • The average sentence imposed decreased from 18 months to 15 months during that time period. 

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