How to Negotiate a Plea Deal in a Criminal Tax Case

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Facing a criminal tax investigation is intimidating for even the savviest of business owners. Finding out that your business and personal affairs are being targeted by IRS or another government agency for a criminal investigation is threatening and uncertain as to the potential outcome.  As a business owner, prepare for a plea negotiation based on facts, witnesses, and documents that may support a defense.  Go into these meetings educated and informed.  Also, hire an experienced tax attorney focused on creating a strategic defense from the start, to begin to navigate the plea negotiation process with greater confidence.

In this blog, we will explore steps to take before negotiating a plea deal in a criminal tax case.  You will also the important questions to ask before hiring an attorney to ensure the attorney understands how to navigate the legal, tax, and business issues.

How does a criminal investigation start? 

Criminal investigations are initiated by various federal agencies, such as IRS.  With IRS, these investigations can start with a civil tax examination; IRS identifies your involvement in criminal activity; or someone provided a lead with enough information to allow IRS to identify potential criminal activity. From the start of an investigation, IRS will assign a Criminal Investigator (“CI”) to your case; however, you may not discover that an investigation has commenced until months later when you or your CPA is contacted by the CI for information and tax returns.  Once the CI has completed their investigation and collected sufficient evidence, the case is then forwarded to an attorney at the US DOJ or US Attorney’s Office for prosecution.

If you are negotiating a plea, then the government has already collected enough evidence to determine whether to move forward with an indictment.  Plea bargaining is a process of negotiation between the defendant’s attorney and the prosecutor, with the aim of reaching a mutually acceptable agreement. In a criminal tax case, the plea agreement could include a reduced sentence and/or restitution (payment for damages) or potentially no jail time at all. However, negotiating a plea deal requires careful preparation and a strategic approach.

The first step in negotiating a plea deal is to analyze the evidence gathered by the lead agency, along with the scope of the investigation. This can be achieved through consultation with the investigating agent(s) and the prosecutor. If you are the target of a criminal investigation and have been contacted by a criminal investigator, you should have representation to avoid providing information or evidence that can be used against you.  A defense attorney can a defendant understand the facts (from the prosecutor’s view) and assess potential defenses to use in the negotiation process.

With a solid understanding of the case, the attorney can then start building a narrative or story that supports the defendant’s position. This could include highlighting unique facts that may not be known to the criminal investigator, mitigating circumstances (i,e. cooperation with the investigation), prior good behavior, and other factors that may influence whether the prosecutor decides to move forward with the case. A defense attorney will use this narrative as part of the negotiation process.

Do you need an attorney to negotiate a plea deal? 

One of the key benefits of having an attorney during (and before) plea bargaining is the protection of the defendant’s rights. When defendants attempt to negotiate without an attorney, they may unknowingly provide evidence and information about themselves that may establish the prosecutor’s case against them.  Defendants typically and inadvertently provide the prosecutor with evidence that will be to collect additional evidence to strengthen the prosecutor’s case.  Cooperating with a prosecutor can be beneficial to resolving the case through a plea agreement.  However, identifying specific information to provide to a prosecutor is essential.  Defense attorneys can help filter evidence and information to determine what information to provide and what information not to disclose as the attorney’s role is ultimately to defend their client yet be truthful to the government.

It is important to note that plea deals are not always offered or favorable in every criminal tax case. Some cases may have insufficient evidence, while other investigations may have aggravating circumstances that make it difficult to negotiate a favorable plea deal. With a strategic approach, business owners facing criminal tax investigations can increase their chances of negotiating through a plea.

Negotiating a plea deal in a criminal tax case requires careful preparation, strategic thinking, and experienced legal representation. Business owners who are facing criminal tax investigations should seek a tax attorney with criminal defense experience.  Tax cases do have unique issues that require the attorney to investigate and craft a narrative that can illustrate to the prosecutor why the case may have a low chance of obtaining a conviction and why the tax loss to the government may be low. Having the right strategy and experienced attorney will make navigating this complex legal process easier.

How long do IRS Criminal cases usually last? 

The length of an IRS criminal case can vary widely and depends on various factors, such as the complexity of the tax issues; the number of transactions and tax years involved; the amount of money (or tax loss to the government); the available evidence to support the prosecutor’s case; the geographic location of potential witnesses; how long the investigation has taken and the number of resources invested by the government.  

In some cases, the IRS may be able to resolve the case quickly through a plea bargain or settlement agreement once IRS has completed its preliminary investigation. If a plea agreement cannot be reached, and the case is set for trial, the time to complete a case can be years away.  Some defendants do prefer to resolve a case quicker (even through a plea that accepts responsibility for some charges) rather than having the stress created by the uncertainty of whether they will succeed at trial.

It is important to note that IRS criminal investigations can be extensive and invasive.  Investigations usually involve multiple interviews, subpoenas, and search and seizure of personal and business records before the IRS presents its case to a prosecutor.  

If you are facing an IRS criminal investigation, it is important to seek the guidance of an experienced tax attorney who can help you understand your legal rights and options, and work to minimize the negative consequences of the case. A qualified attorney can also help you negotiate with the prosecutor and work towards a favorable resolution that includes either no or little jail time and minimizes the taxes and damages (restitution) you may owe.

Learn More About Milikowsky Tax Law

If you’re facing criminal tax charges or anticipate that you might, it’s crucial to understand the plea bargaining process and how to negotiate a favorable plea deal. Our team of experienced criminal tax attorneys at Milikowsky Tax Law can help you prepare a strong defense strategy and negotiate a plea deal that minimizes the impact of your charges. 
Learn more about how to hire a tax attorney, here.