Tax Evasion Sentencing Guidelines: How Much Jail Time?

Tax Evasion Sentencing Guidelines: How Much Jail Time?

Getting charged with tax evasion can be scary. Most people have no idea how much jail time they might face if convicted. This article will break down the sentencing guidelines so you understand the potential penalties.

First off, tax evasion is a felony charge, meaning its a serious crime. If your convicted, your looking at fines up to $100,000 and up to 5 years in federal prison per offense. Thats just the baseline maximum penalty under the law.

In reality, your actual sentence depends on a ton of factors. The main one is how much taxes you evaded. The more money involved, the harsher your likely to be punished if caught.

The Federal Sentencing Guidelines

While judges have some flexibility, most sentences for tax crimes fall within the ranges set by the U.S. Federal Sentencing Guidelines. These rules provide a formula to calculate a sentencing range based on the amount evaded and other factors.

Heres a quick overview of how the guidelines work for tax offenses:

• The base offense level starts at level 6 if the tax loss is $2,500 or less
• The offense level increases as the tax loss amount goes up
• At $100,000+ in tax loss, your looking at offense level 20 or higher
• Your criminal history score also raises the offense level
• The final offense level gives a sentencing range in months

For example, say you evaded $50,000 in taxes and have no criminal record. That would likely result in an offense level of 16, which gives a sentencing range of 21-27 months under the guidelines.

How Much Jail Time for Different Tax Loss Amounts?

As you can see, the amount of tax loss drives the length of sentence under the guidelines. Heres a breakdown of the likely sentencing range for different tax evasion amounts:

• $5,000 or less – 0 to 6 months jail time
• $10,000 – 4 to 10 months jail time
• $25,000 – 6 to 12 months jail time
• $50,000 – 12 to 18 months jail time
• $100,000 – 18 to 24 months jail time
• $250,000 – 30 to 37 months jail time
• $500,000 – 37 to 46 months jail time
• $1 million – 46 to 57 months jail time

Once you get above $550,000 in tax loss, your looking at 5+ years in prison as the baseline sentencing range. But it can go much higher with aggravating factors.

What are the Aggravating and Mitigating Factors?

While the tax loss amount is the primary driver, judges also consider aggravating and mitigating factors that can raise or lower your sentence. These include:

• Criminal history – More prior offenses means more jail time
• Sophisticated means – Hiding money offshore or through shell corps raises sentences
• IRS auditor mislead – Lying to auditors is an aggravating factor
• Abuse of trust – Evading payroll taxes or as a fiduciary is worse
• Acceptance of responsibility – Admitting guilt early helps lower jail time

These factors can add or subtract several offense levels, significantly impacting your final sentencing range.

How Much Jail Time Have Real Tax Evaders Gotten?

Looking at real cases can give you an idea of how much prison time tax evaders really end up serving. Here are some examples:

• Wesley Snipes – 3 years for $7 million tax loss
• Mike Sorrentino – 8 months for $900,000 tax loss
• Joe Francis – 10 months for $20 million tax loss
• Sophia Loren – 17 days for $700,000 tax loss
• Leona Helmsley – 18 months for $1.2 million tax loss

As you can see, sentences vary widely based on the circumstances. But multi-year sentences are common for larger tax evasion amounts.

The Bottom Line

Getting charged with tax evasion is extremely serious. While its impossible to predict exactly how much jail time you could get, the sentencing guidelines provide ranges based on the amount evaded. Smaller cases may end up with less than a year in jail. But anything over $100,000 is looking at potential multi-year prison sentences if convicted.

The best way to avoid jail for tax evasion is not to evade taxes in the first place. But if you made some mistakes or got bad advice, consult with an experienced tax attorney right away. An attorney may be able to negotiate a favorable plea deal or get charges reduced or dismissed. Don’t wait – get qualified legal help as soon as possible.

Sources:

[1] https://www.irsstreamlinedprocedures.com/tax-evasion-penalties-and-sentencing-guidelines/

[2] https://www.sambrotman.com/tax-evasion-penalties

[3] https://www.ussc.gov/guidelines/amendment/491

[4] https://www.ussc.gov/research/quick-facts/tax-fraud

[5] https://www.thetaxlawyer.com/tax-fraud-tax-crimes/information-advice/amendment-to-federal-sentencing-guidelines-for-tax-crimes