Posts Tagged ‘Sentencing’

One of the sadder moments in criminal defense work occurs when a parent is ordered to begin a prison sentence while leaving behind a family.  Even worse is a tax evasion case out of Ireland, where both parents were ordered to serve multi-year prison sentences while leaving behind 10, 16, & 18-year-old children.

Parents jailed for tax fraud – Tax, Money – Belfasttelegraph.co.uk

Two Northern Ireland parents were jailed on Friday 26 February 2010 for evading tax leaving them owing HM Revenue & Customs over £4 million.

Leaving children aged 10, 16 and 18 this should serve as a warning to anyone fiddling their taxes on a large scale. HMRC means business, and having children at home will not keep you out of jail.

Gerry Small (Patrick Gerard Small) of Cullenrammer Road, Dungannon, aged 56 was jailed for 3.5 years after pleading guilty. The judge said this sentence was substantially reduced “as an act of mercy” in the light of Mr Small’s ill-health. Medical evidence pointed to a list of 10 conditions which Mr Small suffered from. Mr Small had tried to pin the blame for the tax offences on Mrs Small – a tactic which the judge described as “dishonest and unedifying”.

Mary Small – his wife of the same address – aged 50 was jailed for 2.5 years. Her sentence was reduced to reflect her prompt guilty plea and the fact that she did not play games with the legal system once she pleaded guilty. (By way of contrast Gerry Small pleaded not guilty, then guilty, then said he wanted to back to not guilty. Finally he abandoned that tactic and so remained at guilty!) The judge acknowledged the difficulty and distress that jailing a mother of a 10-year-old would have, but felt he had no alternative but to send her to jail as well as her husband.

The answer to the question posed in the title of this blog varies depending on a variety of factors, one of which is the “Tax Table” contained in Section 2T4.1 of the Federal Sentencing Guidelines.  The Guidelines are advisory only, and there are other factors which a sentencing judge must consider.

The Tax Table can be helpful to assist in determining a potential range of punishment that a judge may consider when sentencing a taxpayer convicted of committing a tax crime.  The table below shows which “offense level” fits based on the amount of “tax loss,” which in and of itself is a sometimes difficult concept to understand.  To analyze where you fit on the Sentencing Guidelines, determine the amount of Tax Loss and find your corresponding Offense Level on the chart below.

Tax Guidelines

§2T4.1. Tax Table

Tax Loss (Apply the Greatest) Offense Level

(A) $2,000 or less 6

(B) More than $2,000 8

(C) More than $5,000 10

(D) More than $12,500 12

(E) More than $30,000 14

(F) More than $80,000 16

(G) More than $200,000 18

(H) More than $400,000 20

(I) More than $1,000,000 22

(J) More than $2,500,000 24

(K) More than $7,000,000 26

(L) More than $20,000,000 28

(M) More than $50,000,000 30

(N) More than $100,000,000 32

(O) More than $200,000,000 34

(P) More than $400,000,000 36.

Once you have determined your Offense Level, review the Sentencing Table below:

U.S. Sentencing Guidelines

The Sentencing Guidelines are only one factor that a sentencing judge will consider before he/she sentences a convicted tax defendant.  An experienced criminal defense attorney can be essential in developing your best approach at a sentencing hearing.  To contact an attorney today to discuss how your actions may impact your range of punishment, contact Norman D. McKellar today at 877-4-TAX-SOS.

When a taxpayer submits an Offer in Compromise, the taxpayer will also submit a Collection Information Statement, which is essentially a financial statement.  This Statement is signed under penalty of perjury.  Virginia Ferrari was sentenced this week for defrauding the IRS by lying on her Collection Information Statement.  As discussed previously, it’s never a good idea to lie to the IRS.

Rio Vista woman sentenced to prison for defrauding IRS – The Reporter

A Rio Vista woman was sentenced Tuesday in connection with defrauding the Internal Revenue Service.

U.S. District Judge Lawrence K. Karlton sentenced Virginia Ferrari, 52, to six months in prison followed by six months of home confinement while serving one year of supervised release, restitution to the IRS of $913,574.91, and a fine of $25,000 for subscribing to a false tax document. She pleaded guilty on Nov. 25, 2008.

Officials said Ferrari had submitted to the IRS an “offer in compromise,” to settle for $19,000 in debts owed to the IRS, which included $913,574.91 for a trust fund recovery penalty and $44,140 income liability, and interest and penalties. In her accompanying financial statement, signed under penalty of perjury, she omitted four parcels of real property and a bank account, which had been concealed in a revocable trust.

Karlton said he was troubled by the defendant’s continued pattern of behavior following her guilty plea of concealing assets that would otherwise be available to pay her debt to the IRS. Court records showed that Ferrari’s behavior involved lying to the probation officer by saying that her home had sold in foreclosure when, in fact, it sold for more than $2 million. The sentencing hearing had been delayed to allow the government to subpoena the records of the sale. She begins her sentence on April 5.