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I. Tax Crime Statutes
A. Criminal Offenses Under The Internal Revenue Code
1. Section 7201 - Tax Evasion
2. Section 7202 - Willful Failure to Collect or Pay Over Tax
3. Section 7203 - Willful Failure to File Return, Supply Information or Pay Tax
b. Tax Protestors
4. Section 7206 - False Returns and Preparers of False Returns
5. Section 7207 - Submitting False Documents
6. Section 7212(a) - Attempts to Interfere with Administration of Internal Revenue Laws
7. Statute of Limitations for Internal Revenue Code Offenses
8. Criminal Penalties for Browsing
9. Section 7213(d)-Disclosure of Software
B. Related Offenses Under the Criminal Code
1. Conspiracy - 18 U.S.C. § 371
2. False Statements - 18 U.S.C. Section 1001
3. False Claims - 18 U.S.C. Section 287
4. Money Laundering - 18 U.S.C. Sections 1956 and 1957
5. RICO Violations - 18 U.S.C. Sections 1961â€“1968
6. Perjury - 18 U.S.C. Section 1621
7. Mail Fraud - 18 U.S.C. Section 1341
8. Bribery - 18 U.S.C. § 201
9. Aiding and Abetting - 18 U.S.C. § 2
10. Failure to File Currency Transaction Reports and Related â€œStructuringâ€ Violations - 31 U.S.C. § 5313 and 5324
C. Fee Reporting Requirements
D. Comparison with State Statutes - California Model
II. Corporate Criminal Liability
A. Basic Principles
B. Elements of Corporate Criminal Liability
1. Essential Elements
2. Who Binds the Corporation?
3. Was the Criminal Act Committed for the Benefit of the Corporation?
C. Other Issues Related to Corporate Criminal Liability
1. Corporate Liability for Acts in Violation of Corporate Policy
2. Application of the Double Jeopardy Clause to Corporations
D. The Nature of Corporate Tax Crimes
1. Improper Payments
a. Payments to Government Officials
b. Illegal Payments
c. Payments Made in Foreign Countries
2. Corporate â€œSlush Fundsâ€
3. Allocations of Income Among Related Corporations
4. Diversion of Corporate Funds to Personal Use
III. The Administrative Process
A. Basic Jurisdiction Regarding Criminal Tax Cases
1. Criminal Investigation Division
2. District Counsel
3. Criminal Section, Tax Division, Department of Justice, Washington, D.C.
4. Office of the United States Attorney
B. Basis for Criminal Investigation
1. Civil Audits
3. Other Leads
C. Methods of Proof
1. Direct Proof (Specific Item)
2. Indirect Proof (Circumstantial)
a. Net Worth and Expenditures Method
b. Bank Deposits Method
D. Special Problems
1. Deviations from Regular Practice
2. The Extension of Time
3. Tolling the Statute of Limitations
E. Practitioner's Strategy During Investigation
1. Voluntary Disclosure
2. Power of Attorney and Initial Contact with IRS
3. Documentary Submissions and Cooperation with Agents
4. Culpability and Prosecutorial Attitude
IV. Information Gathering by Investigators
A. Summonses Generally
B. Service of Summons
C. Summons Enforcement Actions
1. In General
2. Defenses to a Summons Enforcement Action
D. Third Party Summonses
E. John Doe Summonses
F. The Corporate Summons
1. Obtaining Corporate Records
a. Service of the Summons on the Corporation
b. Determining the â€œRelevancyâ€ of the Corporate Records Sought
c. The Overbroad or Burdensome Summons
d. The Designated Summons
2. The Corporation as a Third Party Recordkeeper
3. Obtaining Records of Foreign Corporations
a. Formal Document Request (Section 982)
b. Jurisdiction Over Foreign Corporations
c. Effect of Foreign Laws on IRS Summons Power
d. Effect of U.S. Law on Foreign Document Requests
4. The Eleven Questions
G. Undercover Tax Investigations
H. Grand Juries
I. Search Warrants
1. Warrant Requirements
2. Obtaining a Warrant in Tax Cases
3. Execution of the Warrant
4. Standing to Challenge the Search and Seizure
5. Use of Mail Covers and Electronic Surveillance in Tax Investigations
V. Taxpayer Rights During Investigations
A. Taxpayer Bill of Rights
B. Fifth Amendment
1. In General
2. Miranda Warnings
3. The Corporate Setting
C. Application of the Sixth Amendment to Tax Cases
1. Right to Counsel
2. Right to Speedy Trial
D. Freedom of Information Act
E. Evidentiary Privileges
1. Attorneyâ€“Client Privilege
a. Attorneyâ€“Client Privilege Defined
b. The Crimeâ€“Fraud Exception to the Privilege
c. Application of the Privilege to the Corporation
(1) Identifying the â€œClientâ€ in the Corporate Setting - Upjohn
(2) Determining Whether the Communication Was Made to Secure Legal Advice
(a) Problems Involving Inâ€“House Counsel
(b) Special Counsel
(i) In General
(ii) Special Counsel Retained for Internal Investigations
(3) Maintaining the Confidentiality of the Communication
(a) Dissemination Within the Corporation and Among Third Parties
(b) Segregation of Confidential from Nonâ€“Confidential Corporate Communications
d. Waiver of the Privilege
(1) In General
(2) Who Can Waive the Privilege?
(3) Inadvertent Disclosure
(4) Disclosure to Parties Having a Common Interest or Joint Defense
(5) Waiver by Introducing Privileged Material
(6) Waiver by Introducing Privileged Material to a Federal Agency
2. Work Product Immunity
a. Attorney's Work Product Defined
b. Attorneyâ€“Client Privilege Distinguished
c. Overcoming Attorney's Work Product Protection
d. Waiver of Attorney's Work Product Protection
e. The Crimeâ€“Fraud Exception to Attorney's Work Product Protection
3. Accountant's Work Product
4. Statutory Privilege of Confidentiality for Communications with Federallyâ€“Authorized Practitioners
VI. Federal Sentencing Guidelines
A. Introduction/Purpose of Sentencing Guidelines
B. Legal Force of Guidelines, Policy Statements and Commentaries
C. Effective Date of Guidelines
1. Amendments to Guidelines
2. â€œOne Bookâ€ Rule
4. Post Sentencing Amendments
D. Overview - Application of the Federal Sentencing Guidelines to Tax Crimes
1. Guideline Section
2. Base Offense Level and Offense Characteristics
4. Criminal History
5. Guideline Range
6. Sentencing Options
7. Departure from Guideline Range
E. Selecting the Appropriate Guideline Section
1. Part T - Offenses Involving Taxation - Summary
2. Specific Tax Crime Analysis
a. Tax Evasion, False Tax Returns, Failure to File - Guideline Section 2T1.1
(1) Determination of Tax Loss
(a) False Return Made Without Intent to Facilitate Evasion of Tax
(b) Evasion of Payment (Collection) Cases
(c) â€œStackingâ€ of Corporate and Individual Tax Liabilities
(d) Payment of Tax Liability
(e) Pre-and Post-Guideline Counts of Conviction
(2) Base Offense Level
(3) Specific Offense Characteristics
(a) Criminal Activity
(b) Sophisticated Means
(4) Relevant Conduct
(a) Uncharged Criminal Tax Conduct May Be Considered
(b) Counts Dismissed as Part of Plea Bargain
(c) Acquitted Conduct
(d) Years Barred by Statute of Limitations
(e) State Tax Loss
(f) Information Provided Pursuant to Cooperation Agreement
b. Aiding, Assisting, Procuring, Counseling or Advising Tax Fraud - Guideline Section 2T1.4
c. Failing to Collect or Truthfully Account for and Pay Over Tax - Guideline Section 2T1.6
d. Failing to Deposit Collected Taxes in Trust Account as Required After Notice - Guideline Section 2T1.7
e. Offenses Relating to Withholding Statements - Guideline Section 2T1.8
f. Conspiracy to Impair, Impede or Defeat Tax - Guideline Section 2T1.9
(1) Specific Offense Characteristics
(2) Relevant Conduct
F. Adjustments to Base Offense Level
1. Acceptance of Responsibility
2. Obstruction of Justice
3. Role in the Offense
a. Aggravating Role
b. Mitigating Role
c. Abuse of Position of Trust or Use of Special Skill Adjustment
4. Vulnerable Victim
G. Criminal History
H. Determination of Guideline Range
I. Sentencing Options
J. Departure from the Guidelines
2. Downward Departures
a. â€œKey Manâ€ Departure
b. Tax Loss Overstates Seriousness of Offense
c. Extraordinary Acceptance of Responsibility and Postâ€“Offense Ameliorative of Conduct
d. Voluntary Disclosure
e. Lack of Sophistication in the Commission of the Offense
g. Reduced Mental Capacity
h. Family Responsibilities
i. Departure Based on Combination of Factors
j. Extraordinary Collateral Consequences
k. Aberrant Behavior
l. Charitable Activities
m. Substantial Assistance Departures
3. Upward Departures
K. Role of U.S. Probation Department
L. Constitutionality of Sentencing Guidelines
M. Sentencing Guidelines for Organizations
O. Monetary Fines Under the Guidelines
Table of Worksheets
Worksheet 1 Accountant Retainer Agreement.
Worksheet 2 Notice of Criminal Investigation - Individual.
Worksheet 3 Notice of Criminal Investigation - Corporation.
Worksheet 4 Notice of Termination of Criminal Investigation.
Worksheet 5 Notice of Referral of Criminal Prosecution From CID to District Counsel.
Worksheet 6 Notice of Preâ€“Prosecution Conference.
Worksheet 7 Notice of Recommendation of Criminal Prosecution to Department of Justice.
Worksheet 8 Request for Conference with Department of Justice.
Worksheet 9 Request for Conference with U.S. Attorney.
Worksheet 10 Notice of Department of Justice Conference.
Worksheet 11 Notice of Criminal Prosecution.
Worksheet 12 Tolling Agreement
Worksheet 13 Indictment for Making and Subscribing to False Income Tax Returns.
Worksheet 14 Waiver of Indictment.
Worksheet 15 Information for Willfully Aiding and Abetting Preparation of False Documents.
Worksheet 16 Indictment for Conspiracy.
Worksheet 17 Statement of Defendant's Constitutional Rights.
Worksheet 18 Designation and Appearance of Counsel.
Worksheet 19 Waiver of Defendant's Presence.
Worksheet 20 Motion for a Bill of Particulars.
Worksheet 21 Defendant's Motion for Discovery and Inspection.
Worksheet 22 Standing Court Order for Discovery, Stipulations and Evidence in Criminal Cases.
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