U.S. Sentencing Commission Quick Facts for Tax Fraud Offenses for fye 2017 (11/05/18)

I offer the U.S. Sentencing Commision's "Quick Facts" on key characteristics for sentencing for "Tax Fraud Offenses for fiscal year 2017.  The pdf is available from the Sentencing Commission's web site here.  I could not find a way to make legible copies of the pages on this blog page.

The facts (mostly statistics) are for offenders sentenced under Sections 2T1.1 land 2T1.4 of the Guidelines Manual which are the tax guidelines.  The 2018 Guidelines Manual is here.  Readers should remember that, previously the Government would assert sentencing for FBAR violations under the tax guidelines. but the Government had a change of mind on the appropriate sentencing for FBAR violations.  See Offshore Account Defendant Sentence with Court Accepting Government's New Position on Guidelines Calculations (1/25/18), here; Questions About New DOJ Tax Policy on FBAR Sentencing Guidelines (12/11/17), here; More on New DOJ Tax Position on FBAR Sentencing Guidelines (11/9/17), here. Another FBAR Plea And Notice of Government Change of Position on Applicable Guidelines (10/27/17), here.

Certain key items for fiscal year 2017 are:

• There were 584 tax fraud offenders sentenced, who accounted for 0.9% of all offenders sentenced under the guidelines.  These seem low compared to the IRS statistics for sentencing.  My spreadsheet with the statistics is here.  The spreadsheet has links to the IRS statistics.  I have not tried to reconcile the differences.
• The majority of tax fraud offenders had little or no prior criminal history (80.5%of these offenders were assigned to Criminal History Category I).
• The median tax loss for these offenses was $277,576.
• 87.2% of tax offenses involved tax losses of $1.5 million or less.
• 19.8% of tax offenses involved tax losses of $100,000 or less.
• Sentences were increased: (i) 12.5% for sophisticated means; (ii) 8.4% for leadership or supervisory role; (iii) 3.8% for abusing position of public trust; and 8.7% for obstructing or impeding the administration of justice.
• More than half of tax fraud offenders were sentenced to imprisonment only(59.1%).
• The average sentence length for tax fraud offenders was 17 months
• During the past five years, the rate of within range sentences for tax fraud offenders has decreased (from 36.1% in fiscal year 2013 to 26.5% in fiscal year 2017).
• In each of the past five years, approximately one-quarter of tax fraud offenders received a sentence below the guideline range because the government sponsored the below range sentence.
• Substantial assistance departures were granted in approximately 15 to 17 percent of tax fraud cases in each of the past five years,  These offenders received an average reduction of 67.3% in their sentence during the five-year time period (which corresponds to an average reduction of 17 months).
• Other government sponsored departures were granted in approximately seven to thirteen percent of tax fraud cases in each of the past five years,  These offenders received an average reduction of 68.1% in their sentence during the five-year time period (which corresponds to an average reduction of 13 months).
• The rate of non-government sponsored below range sentences increased during the past five years (from 40.8% of tax fraud cases in fiscal year 2013 to 45.9% in fiscal year 2017). Reductions for non-government sponsored below range sentences were smaller than in cases in which the government sponsored a below range sentence, with an average reduction of 59.0% during the five-year time period (which corresponds to an average reduction of 12 months).
• Reductions for non-government sponsored below range sentences were smaller than in cases in which the government sponsored a below range sentence, with an average reduction of 59.0% during the five-year time period (which corresponds to an average reduction of 12 months). The average guideline minimum ranged between 24 months and 26 months during that time period.  The average sentence ranged between 15 months and 18 months during that time period.

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.