A Presentence Investigation Report (“PSR”) is a document that judges use to help assess a defendant’s penalty for a crime. If a criminal defendant is found guilty or pleads guilty to a federal crime, the court will order the defendant to go through the PSR process. Although this article focuses on federal tax crimes such as tax evasion or the filing of false tax returns, the content of this article can apply to other federal offenses.
The PSR process is governed by Rule 32 of the U.S. Rules of Criminal Procedure. A PSR details the defendant’s background and criminal conduct and is based, in part, on an interview with a defendant. Because the PSR can help courts find the most appropriate sentence and mitigate the severity of a sentence, it is one of the most important processes in a federal criminal tax case.
A PSR is not only used by the court to determine the sentence, in the event a defendant is sentenced to prison, a PSR is used to determine a classification score by the Bureau of Prisons. The Bureau of Prisons classifies prisons primarily by one of five security levels: 1) minimum security; 2) low security; 3) medium security; 4) high security; and 5) administrative security. A PSR will also be utilized by the Bureau of Prisons to determine if a defendant qualifies to enter into various programs.
Once a defendant is found guilty of a federal crime or pleads guilty to a federal crime, the court will order the defendant’s counsel to contact the United States Department of Probation Office. After the defendant’s counsel contacts the U.S. Department of Probation, a U.S. Probation Officer will schedule a meeting to interview the defendant. The defendant should understand that the Probation Officer who conducts the interview will become the most important person in his or her life. This is because federal district court judges listen to the recommendations stated in the PSR of the Probation Officer in regards to sentencing. Thus, the defendant should carefully prepare for the interview. In answering the interview questions, the defendant should not only answer each question honestly, but also convey the following to the Probation Officer:
1. The defendant has accepted responsibility for his or her actions. Acceptance of responsibility means that the defendant understands that they committed a tax crime and he or she intends to satisfy any outstanding tax liability, penalties, interest, and restitution. Acceptance of responsibility also means that the defendant will cooperate with Internal Revenue Service (“IRS”) investigators to determine the correct tax liability that is owed to the government;
2. What happened in the defendant’s life to cause the defendant to violate the tax law. Sometimes a defendant did not have a proper upbringing or suffers from diminished capacity. The defendant should be prepared to identify the possible cause as to why he or she committed the offense.
3. What will the defendant do in the future to avoid violating the law. The Probation Officer will likely want to make sure that the defendant does not reenter the criminal justice system in the future. Thus, the defendant should convey a plan to the Probation Officer to make sure he or she will not have issues with the IRS in the future. This could include the hiring of a reputable tax accountant to make sure future tax returns are filed correctly.
4. The community service the defendant has provided to the community. Probation Officers typically like to hear about the community services that a defendant has performed in the past. It is very important for a defendant to discuss any community services that he or she has provided to the community.
5. The defendant will need to convey to the Probation Officer the consequences he or she has already suffered as a result of committing the offense. This could include the loss of a professional license or the loss of a job.
The type of questions that the Probation Officer will ask the defendant depends on the district. If the defendant is scheduled to be sentenced by the U.S. District Court for the Central District of California, the Probation Officer will ask the following questions about the defendant’s Offense Data:
1. The Probation Officer will ask the defendant to name any co-defendants and related cases.
2. The defendant will need to state the offense, statutes, offense classification, and minimum/maximum statutory penalty.
3. The defendant will need to describe any plea agreement and the amount of financial loss.
4. The defendant will need to attach a statement regarding the acceptance of responsibility.
The Probation Officer will ask the following questions regarding the defendant’s criminal history:
1. The defendant will need to list his or her criminal history, arrests, pending charges, and supervision status.
The Probation Officer will ask the following questions regarding the defendant characteristics:
1. The defendant will need to list every town or city where he or she has lived;
2. The defendant will need to state the name of his or her biological parents or the persons other than his or her natural parents. The defendant should list his or her present address, telephone number, and occupation.
The Probation Officer will ask the following questions about the defendant’s marital status:
1. The name of his or her spouse or domestic partner.
2. Date and place of marriage.
3. Date of separation.
4. Date of divorce and court where the divorce was granted.
5. Number of children.
The Probation Officer will ask the following questions about the defendant’s children:
1. Child’s name.
2. Name of other parent of the child.
3. Age.
4. Custody support.
5. Child’s address and telephone number if different from the defendant
The Probation Officer will ask the following questions about the defendant’s physical condition:
1. The defendant will need to describe his or her height, weight, eye color, hair color, tattoos, and scars.
2. The defendant will need to list the dates and nature of any serious or chronic illnesses and medical conditions.
3. The defendant will need to list all current prescriptions.
4. The defendant will need to provide the name, address, and telephone number of his or her physician.
5. The defendant will need to describe any past or present mental, emotional, or gambling problems.
The Probation Officer will ask the following questions about the defendant’s substance abuse:
1. The defendant will need to state if he or she has used alcohol, marijuana, cocaine, crack, amphetamine/methamphetamine, heroin, barbiturates, hallucinogens, inhalants, or other drugs.
2. The defendant will need to state the last time alcohol or controlled substance was last used.
3. The defendant will need to state which substance he or she prefers.
4. The defendant will need to state which substance has caused him or her the most problems.
5. The defendant may need to take a urine test and state the results of that test.
6. The defendant will need to describe in detail his or her history of substance abuse and treatment.
The Probation Officer will ask the following questions about the defendant’s education and vocational skills:
1. The highest grade completed by the defendant.
2. The names of schools attended and degrees, diplomas, or certificates received.
3. The defendant should state if he or she received training or skills and any professional licenses.
If applicable, the Probation Officer will ask about the defendant’s military service including:
1. The branch of service.
2. Service number.
3. Rank.
4. Description of combat service and any special training acquired.
The Probation Officer will ask the defendant the following questions about his or her employment:
1. What is the defendant’s occupation.
2. At the time of the offense, was the defendant employment and for how many months.
3. The defendant will need to describe his or her employment history for the last ten years, including periods of unemployment.
4. The defendant will need to summarize any employment beyond 10 years.
In many cases, with assistance of defense counsel, defendants can answer the aforementioned questions prior to the interview and submit the answers to the Probation Officer.
The Probation Officer will also require the defendant to prepare and file with the probation officer an affidavit fully describing his or her financial resources, including a complete listing of all assets. The Probation Officer may also request that the defendant provide the following:
1. Copies of tax returns filed by the defendant for the last three years.
2. Copies of school diplomas and school transcripts.
3. Copies of marriage certificate.
4. Copies of divorce degrees.
5. Copies of medical records.
6. Copies of naturalization papers (if applicable).
7. Copy of Military discharge certificate (if applicable).
The Probation Officer will then follow-up on all the information collected. If the U.S. probation Officer believes that the defendant was misleading during the interview, or failed to accept responsibility, the probation officer may recommend that the defendant not be given credit for acceptance of responsibility or receive an upward departure from the sentencing guidelines.
Any material a defendant’s counsel would like the Probation Officer to consider for the PSR must be submitted to the Probation Officer at least 45 days prior to sentencing. While note required, defendant’s counsel may want to submit the following to the Probation Officer:
1. A Personal Narrative or Autobiography of the defendant.
2. Character Reference Letters.
The Probation Officer is required to provide a proposed PSR to both the defendant’s counsel and the prosecution before sentencing. The proposed PSR is furnished, defense counsel who is required to draft a written response to the Probation Officer’s proposed PSR. If defense counsel has no objections to the factual statements or guideline computations, defense counsel shall notify the Probation Officer in writing that he or she has no objections. If defense counsel has objections, defense counsel must attend a meeting called by the Probation Officer. Before sentencing, the final PSR, including an addendum and recommendation is required to be disclosed to all parties and the Court.
Anthony Diosdi is one of several tax attorneys at Diosdi & Liu, LLP. Anthony Diosdi has represented clients accused of tax crimes both pre and post-indictment. Anthony Diosdi is admitted to the California and Florida bars.
Diosdi Ching & Liu, LLP has offices in San Francisco, California, Pleasanton, California and Fort Lauderdale, Florida. Anthony Diosdi advises throughout the United States. Anthony Diosdi may be reached at (415) 318-3990 or by email: adiosdi@sftaxcounsel.com.
This article is not legal or tax advice. If you are in need of legal or tax advice, you should immediately consult a licensed attorney.
Written By Anthony Diosdi
Anthony Diosdi focuses his practice on international inbound and outbound tax planning for high net worth individuals, multinational companies, and a number of Fortune 500 companies.
