Basic Defense Strategies to Use in Criminal Tax Cases

It can get quite complicated being representatives to clients who’ve been charged with a tax crime or are under investigation for criminal tax fraud. 

As the case progresses, you might need a more dynamic defense strategy in order to account for the nature of their charges, the client’s resources for lawyer expenses and fees, and the likelihood of conviction.

Using Collateral Estoppel in Criminal Tax Cases

According to an Orlando criminal defense lawyer, tax crime prosecution usually gets a subsequent forfeiture proceeding or civil tax deficiency contest. 

  • What is the Collateral Estoppel? Once a valid and final judgment determines an issue of ultimate fact, this issue cannot be between the same parties in any future litigation. The collateral estoppel aids in the civil case that the government has against the taxpayer.
  • What to Expect: Such civil procedures include the same basic facts as the tax crime prosecution. Because it involves the same evidence and issues involved, the government will more often than not look to apply the collateral estoppel doctrine to it.
  • Severe Consequences: The consequences and effects of collateral estoppel can be severe for the one being litigated depending on the outcome of the sentencing or plea hearing as well as the underlying tax crime.
  • Plea for Charges with No Preclusions: In tax crime cases, counsel can go to plea to a charge that doesn’t prohibit the client from challenging the civil fraud penalty after the criminal case has concluded or otherwise been resolved.

Avoiding the Imposition of Collateral Estoppel 

You can effectively avoid collateral estoppel imposition when negotiating tax crime plea deals for your client. It’s all about maneuvering plea bargains to advantageous positions that don’t leave the client with more or worse charges that will affect future lawsuits.

  • Avoid Certain Agreements in Plea Bargains: To be more specific, when undergoing a plea deal negotiated with the prosecution for a money-laundering case, counsel could avoid agreements in reference to the tax intent money-laundering provision.
  • Avoid Admissions that Don’t Help Civil Tax Fraud Penalty: Counsel should also try to avoid admission to any overt acts that don’t assist the taxpayer when it comes to civil tax fraud penalty when dealing with a plea bargain for a conspiracy charge.
  • Careful Consideration of Admissions: Counsel and client should carefully consider plea deals when it comes to admissions that could render permanent consequences to any future litigation on civil tax deficiencies.
  • The Key to Negotiations: The key to negotiating a good plea deal involves making the necessary acceptance of guilt statements while refraining from the admission of anything that might confuse or defeat the purpose of avoiding collateral estoppel.

Avoiding Further Federal Crimes

As an attorney and a taxpayer, it’s in your best interests to prevent prosecutors from arriving at non-tax federal crimes of your client. Steer them clear from such issues.

  • Examples of Non-Tax Federal Crimes: Non-tax crimes related to tax crimes include aiding and abetting as well as conspiracy. Prosecutors and special agents usually aim for such crimes when making recommendations for a non-tax crime charge.
  • Be Careful of Criminal Investigations: A discovery of proof to non-tax federal criminal prosecutions can happen regardless of whether a criminal investigation process will end up in prosecution or not. The fact that the CI has an interest in a taxpayer could lead to such a conclusion.
  • Take Care of Keeping the Case on the Tax Offense: Counsel should prevent steering the investigation away from the tax offense itself and into a non-tax criminal charge because it will just complicate the case.

Educate the Taxpayer about Criminal Tax Prosecution

It’s also important to debrief the client about criminal tax prosecution so they’d know what to expect and how to deal with the case. If you’re abroad, you may choose to hire a tax consultant for US expats to help you.

Taxpayer education on the ins and outs of criminal tax prosecution involves understanding that criminal investigation special agents have no interest in civil tax collection, assessment, and determination.

Their sole goal is to determine if a crime has been committed and if it has, recommend prosecution where required. They go through extensive investigations and case review processes before starting a formal criminal prosecution.

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