Tax Crimes and the Department of Justice

Here's a painful truth that I've seen time and time again – the majority of taxpayers are not in tune with how serious tax crimes are. The Department of Justice (DOJ) and how they deal with tax crimes are off the radar of most U.S. citizens, but the consequences can be far-reaching. Not only that, but very citizens sitting on the juries that decide the fate of the taxpayers accused of tax crimes — don't understand the severity of the judgment they are handing out. 


In the United States, there are an estimated 20 million people in noncompliance with their taxes. If you're a taxpayer with a tax problem, take some comfort in the fact that you are absolutely not alone! What people don't understand about their tax returns is that once they've signed off on it, all of the consequences are on their head. That means that you are responsible for any mistakes made by a CPA, any time you accidentally write the wrong number, and any time that you don't understand the law. Seeing as the U.S. tax code is the most complicated in history, U.S. taxpayers are weighed down by a heavy burden. As a taxpayer, you are always ultimately responsible for your returns.

Now it doesn't seem like such a surprising thing that so many U.S. taxpayers are not in compliance.


Targeted justice


Justice is blind, right? When it comes to the IRS, not in the least bit. Instead, the IRS has been known — and has even made it clear in their press releases — to go after easy targets. Instead of targeting the really bad guys — the dangerous criminals and politically-connected — the IRS goes after the taxpayers that will have the toughest time fighting back. These are usually the people owing somewhere in the range of $600,000 to $1,000,000. That doesn't mean if you owe less/more that you won't be targeted, but this tends to be the sweet spot for the IRS to get an easy victory.


Not only are there worries about personal safety and security in play, but there's also the reality that our justice system encourages quantifiable results. So, when the IRS (or prosecuting attorney) has the choice between a case that is likely to succeed (and might earn them some recognition/a promotion), it's unlikely they'll go with one that they're not likely to win.

Does that make it acceptable to specifically target certain earners? Absolutely not.


Watch out for "lawyers"

With a headline like that, you might be scratching your head. After all, isn't IRSMedic — the law firm of Parent & Parent LLP — a full-fledged firm? You bet. We have some of the best lawyers you will ever come across. But the difference between them and many of the "lawyers" you'll come across is what is promised. We only promise the things we know we can deliver on and have delivered on countless times in the past. 


Being wary of lawyers in the courtroom — if you do make it to trial — is also a wise precaution. Remember that the judge is an attorney at heart. Thanks to the incredibly complicated nature of the taxation systems, it's more than likely that the judge will not be 100% aware of everything taking place, leaving him/her to rely on other government employees — namely the IRS — to provide the necessary information. As you can imagine, there's a worrying bias against the taxpayer.


Now you have a case where the judge doesn't necessarily understand what's going on, the jury can't be expected to have a proper grasp on tax law, and prosecution is bursting with confidence (and with the IRS's 94% conviction rate, how could they not be?), and the defense is pressed to try and explain the law to everyone in the courtroom. As you can see, the odds aren't stacked in favor of the taxpayer.


This leads us to one of the most worrying aspects of the entire issue – the jury doesn't understand the gravity of their sentencing. As juries are not permitted to discuss the sentencing (their only mission is to decide if the defendant is guilty or not), they don't understand that they might be sentencing a person to prison for making a simple mistake. Instead of being able to say, "Look, this guy made a mistake. He deserves a fine, but then he can go on his way," the jury has no say in the matter. So they convict the taxpayer and he winds up in prison… where he can't contribute to the community in any meaningful way to rectify his offenses.


What hope is there?

This is the question of the hour. While everything we've looked at so far has shown how the system is stacked against the taxpayer, that doesn't mean there are no options for beating the system.


There are two words that every U.S. person over the age of 18 should be aware of – jury nullification. Jury nullification is when the members of a jury, after deciding that the consequences of finding an individual guilty would likely cause greater harm to the community than removing the case altogether, decide to throw out the case. This can be done for cases that are silly or clearly of no benefit to society as a whole or for cases that violate the jury's sense of morality.


There are two types of crimes: malum prohibitum and malum in se. Malum prohibitum is reserved for crimes that are bad; a crime — such as a murder — has a clear victim and the act itself is a bad thing.  Malum in se refers to crimes that are illegal because they have been deemed illegal (think regulatory offenses). In malum in se cases, there's not necessarily a victim.


When it comes to tax cases, it's important to ask what type of crime has been committed. Who is the victim? You better believe that the defendant is in the midst of one of the worst nightmares of their life and scared to death of the consequences. If you're in a courtroom and you can't clearly define a victim, the victim is more than likely the defendant.


Tax crimes are a serious matter. Understanding the gravity of the situation and how the system is stacked against taxpayers is a big step in making lasting change. Using the available tools — such as jury nullification — and consulting professional tax attorneys is the best way to protect yourself and the ones you love. The tax code is incredibly complex, but that doesn't mean that there aren't ways to give yourself an advantage. If you're overwhelmed and don't know how to position yourself for a positive resolution, take a deep breath; contact us. We're here to help.