By Anthony Diosdi
Every year, the federal government prosecutes thousands of individuals for tax crimes such as tax evasion or willfully filing false or fraudulent tax returns. Although criminal tax investigations typically begin with the IRS, the United States Attorney will make the final decision whether or not to criminally prosecute a defendant. If a decision is made to prosecute an individual for tax crime, the United States Attorney must obtain an indictment for a tax crime by a grand jury. A grand jury may issue an indictment for a tax crime if it finds, based upon the evidence that has been presented to it, there is probable cause to believe that a crime has been committed and the individual accused of the crime committed it.
Once a criminal tax defendant has been indicted for a tax crime, he or she must make an initial appearance before a United States district court. Sometimes criminal tax defendants are arrested and brought to federal court in the custody of a federal agent. On other occasions, criminal tax defendants are served with a legal document known as a “Summons in a Criminal Case.” Below please find a sample “Summons in a Criminal Case” served on a criminal tax defendant (the name of the defendant has been changed to protect his or her privacy):
UNITED STATES DISTRICT COURT
For the
District of New Mexico
United States of America
v.
Joe Taxpayer,
____________________________ )
Defendant
Summons In A Criminal Case
You Are Summoned to appear before the United States district court at the time, date, and place set forth below to answer to one or more offenses or violations on the following document filed with the court:
United States District Court Courtroom No: 3rd Floor, Rio Grande
Place: 333 Lomas Blvd., NW Date and Time: 07/1/2018 9:30 am
Albuquerque, NM 87102
This offense is briefly described as follows:
Count 1: 18 U.S.C. Section 371: Conspiracy
Count 2: 26 U.S.C. Section 7206(2): Aiding and Assisting in Preparation of False and Fraudulent Return, Statement, or Other Document; and
Count 3: 26 U.S.C. Section 702(1): Making and Subscribing False Return, Statement, or Other Document.
Date: 06/12/2018
The grand jury criminal indictment should be attached to the summons.
If you are served with a “Summons in a Criminal Case,” you must appear on the date you are summoned to appear before the district court. Your first appearance before the district court is known as your “Initial Appearance.” At the initial appearance, you will likely appear before a federal magistrate rather than a federal district court judge. An assistant United States Attorney or federal prosecutor will appear before the magistrate on behalf of the government.
When you appear before the magistrate, he or she will inform you of your constitutional rights and the maximum penalties you can receive if found guilty of the offenses stated in the indictment. If you cannot afford to retain a lawyer to represent you, the magistrate will instruct you to complete a financial affidavit. The magistrate will then review the affidavit to determine if you qualify to be appointed a public defender or an attorney from the “Criminal Justice Act Panel.” The Criminal Justice Act Panel is a group of qualified and court-approved attorneys who are eligible for appointment by the district court to represent individuals in criminal cases who are unable for financial reasons to retain counsel.
The next issue that will be addressed during the initial appearance is bail. The government can ask the magistrate to order your detention. The following factors will be considered by the court whether or not your order pretrial detention: 1) the seriousness of the offense or offenses you are charged with; 2) your previous criminal record; and 3) the probability that you will make future court appearances. In our experience, criminal tax defendants are usually released on bond. Most bonds in federal court does not require the posting of any money or property. However, a magistrate may set conditions on release such as restrictions on travel outside the United States. Thus, the magistrate may demand that you surrender your passport to the court. In order to avoid an unpleasant pretrial detention, you should bring your passport with you for your initial appearance.
Shortly after your initial appearance, you will be arraigned. An arraignment is a formal reading of the criminal charges in your presence. In response to the arraignment, you will be expected to enter a plea. During the arraignment, the magistrate presiding over the case will issue a scheduling order. At the conclusion of the arraignment, your counsel may raise a number of pretrial defense motions, objections, or even ask the court to determine the case in your favor without a trial. The following is a sample of the defenses or objections may be raised prior to trial:
- Improper venue;
- Pre Indictment delay;
- A violation of the constitutional right to a speedy trial;
- Selective or vindictive prosecution; or
- An error in the grand jury proceeding.
Motions can also be used prior to trial to suppress certain types of evidence the government intends to use at trial.
In the event a resolution cannot be reached between the parties such as a plea agreement, your case will go to trial. With that said, the vast majority of criminal tax cases are resolved through a plea agreement. If you are found guilty of a tax crime or if you plead guilty to a tax crime, you will likely be interviewed by a Federal Probation Officer. Your lawyer will be present for the interview.
The Probation Officer will utilize the information from the interview to write a draft pre-sentence report. The pre-sentence report discusses your education and employment history, it also discusses the offense or offenses at issue in your case. In addition, the pre-sentence report calculates your sentence utilizing the Federal Sentencing Guidelines. Most federal courts consider the sentence table contained in the Federal Sentencing Guidelines when determining a sentence, even in plea bargaining cases. The sentence table contains guideline ranges in months of imprisonment. There is also an offense level (1 through 43) which forms a vertical axis of the sentencing table. The defendant’s criminal history category (1 through IV) forms the horizontal category of the table. The intersection of the offense level and the criminal history category on the sentencing table displays a range in months of imprisonment. This pre-sentence report is lodged with the court and the judge will take into consideration the pre-sentence report when you are sentenced.
The draft pre-sentence report is provided to your attorney before it is submitted to the court. Your attorney is given the opportunity to make factual and legal objections to the pre-sentence report. Once the parties have resolved any factual and legal discrepancies, the draft pre-sentence report is finalized and lodged with the court for the judge’s consideration. Your attorney will also be permitted to submit a sentencing memorandum to the court arguing for a proposed sentence.
The court will ultimately schedule a sentencing hearing. At the sentencing hearing, the judge will impose a sentence. The judge will take into consideration the pre-sentence report, sentencing memorandum filed with the court, and the Federal Sentencing Guidelines.
The attorneys at Diosdi Ching & Liu, LLP represent clients in criminal tax cases throughout the United States.
Anthony Diosdi is a partner and attorney at Diosdi Ching & Liu, LLP, located in San Francisco, California. Diosdi Ching & Liu, LLP also has offices in Pleasanton, California and Fort Lauderdale, Florida. Anthony Diosdi represents clients in federal tax controversy matters and federal white-collar criminal defense 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.