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How much jail time for tax evasion?
|Thanks for visiting Spodek Law Group. We’re a second-generation law firm managed by Todd Spodek – with over 40 years of combined experience handling federal criminal cases. If you’re reading this, you already know the IRS doesn’t play games. You’re facing a tax evasion investigation or charge, and you want to know what kind of prison time you’re actually looking at.
Todd Spodek has built his reputation defending clients in cases that other lawyers call unwinnable – including the Anna Delvey Netflix case, the Ghislaine Maxwell juror misconduct case, and countless federal fraud prosecutions. We’ve seen every variation of tax prosecution the government throws at people, and we understand how sentencing works in these cases.
Here’s what you need to know about jail time for tax evasion – the statute says one thing, but federal court reality is something different entirely.
The Statute vs. The Reality
Under 26 U.S.C. § 7201, tax evasion carries a maximum sentence of five years in federal prison per count. That’s what the law says. The government loves to threaten defendants with that number during plea negotiations.
The actual average sentence in 2024? Fifteen months. In 2020 it was sixteen months. Very few defendants actually serve anywhere close to the five-year maximum – judges rarely impose it even in serious cases. The sentencing guidelines drive everything, and those guidelines are based primarily on one number: the tax loss.
Tax loss means the amount of tax you allegedly evaded or attempted to evade. Not the income you didn’t report – the actual tax that should have been paid on that income. Federal prosecutors calculate this obsessively because it determines your base offense level under the sentencing guidelines.
The Tax Loss Table Controls Your Sentence
Federal sentencing for tax crimes follows Section 2T1.1 of the sentencing guidelines. The judge starts with a base offense level determined by the tax loss amount – then adjusts up or down based on specific factors in your case.
Here’s how it breaks down. Tax loss under $6,500 starts you at offense level 6. Between $6,500 and $15,000 puts you at level 8. The levels climb from there – by the time you’re at $550,000 in tax loss, you’re looking at level 20, which typically means years in prison absent cooperation or other mitigating factors.
Your criminal history category matters too. First-time offenders fall into Category I, which produces much lower guideline ranges than someone with prior convictions. A defendant at offense level 14 with no criminal history faces 15-21 months under the guidelines. That same level 14 with extensive criminal history (Category VI) means 30-37 months.
Judges aren’t required to follow the guidelines anymore – not since United States v. Booker in 2005. But they’re still the starting point for every sentencing, and most judges stick fairly close to the recommended range unless there are compelling reasons to vary.
What Increases Your Sentence
Certain conduct adds levels to your base offense level, pushing you toward more prison time. Using sophisticated means to evade taxes adds two levels automatically. Sophisticated means includes setting up shell corporations, using offshore accounts in the Cayman Islands or Switzerland, creating false invoices or fake business entities – basically anything beyond just not filing your return.
If you failed to report income from criminal activity exceeding $10,000 per year, that’s another two-level increase. The guidelines treat tax evasion connected to other crimes more seriously – drug trafficking income you didn’t report, proceeds from fraud schemes, money from illegal gambling operations.
The amount of income you didn’t report affects the calculation too. When the IRS can’t precisely calculate tax loss, they estimate it as 28% of unreported gross income for individuals or 34% for corporations, plus 100% of any fraudulent credits you claimed. These estimates often overstate the actual tax loss, which gives your attorney room to argue for a lower calculation.
How To Reduce Your Sentence
Acceptance of responsibility is the single most valuable reduction available. If you plead guilty and genuinely accept responsibility for your conduct, you get a three-level reduction from your offense level. That can cut months or years from your guideline range – it’s a huge difference.
But you have to really accept it. You can’t plead guilty and then blame your accountant, claim you didn’t understand the law, or argue the IRS calculated everything wrong. Judges see through that immediately. The reduction disappears if you contest obvious facts or minimize your conduct at sentencing.
Cooperation with the government is the other major way to reduce your sentence. If you provide substantial assistance in prosecuting other people – business partners who participated in the scheme, accountants who helped structure the evasion, other clients involved in the same tax shelter – the government can file a motion for downward departure. We’ve seen cooperation cut sentences by 50% or more in complex tax cases.
First-time offender status helps, though it’s already baked into your criminal history category. Courts generally treat tax defendants with no prior record more leniently than career criminals, but that doesn’t mean probation is guaranteed. Plenty of first-time offenders serve prison time for tax evasion when the loss amount is substantial.
Real Sentencing Examples From Recent Cases
David Wellington was sentenced to 40 months in prison in January 2025 for a multimillion-dollar tax evasion scheme, with over $5.5 million in restitution ordered. His co-defendant Stacy Underwood received time served – meaning no additional prison time – but still has to pay the same $5.5 million restitution. Same scheme, vastly different sentences based on their roles and cooperation levels.
A Texas man got 41 months for failing to report overseas income while working abroad. Jack Fisher and James Sinnott – a CPA and attorney who sold fraudulent conservation easement tax deductions – were sentenced to 25 and 23 years respectively in 2024. Their scheme involved over $450 million in tax loss to the IRS, which explains the extreme sentences.
José Luis Huizar, former Los Angeles city councilmember, received 13 years in federal prison for tax evasion in 2024. Robert Kowalski got 25 years for embezzlement and tax fraud connected to a bank failure. These aren’t typical tax cases – they involved corruption, fraud, and massive losses. But they show that when tax evasion is connected to other serious crimes, judges impose serious time.
Jerry Shrock received five years’ probation in 2025 for his role in the same scheme that sent Wellington to prison for 40 months. Probation instead of prison – that difference usually comes down to cooperation, acceptance of responsibility, and your specific role in the offense.
When The Investigation Starts
Most tax disputes never become criminal cases. The IRS has a civil examination division and a separate Criminal Investigation division. If Criminal Investigation gets involved – if special agents show up at your door with badges – you’re potentially facing prison time.
The IRS Criminal Investigation division handles only cases they believe warrant criminal prosecution. In fiscal year 2024, only 360 tax fraud cases out of millions of tax returns resulted in federal sentencing. The conviction rate for IRS-CI cases is over 90% once charges are filed, because they investigate thoroughly before referring cases to prosecutors.
By the time you’re indicted, the government has already built most of their case – bank records, third-party witness testimony, analysis of your returns going back years. This is why you need experienced federal defense counsel from the moment you learn Criminal Investigation is involved, not after you’re already charged.
What You Should Do Right Now
If you’re under investigation or already charged with tax evasion, your actions in the next few weeks determine whether you serve years in federal prison or avoid incarceration entirely. Cooperating too early without understanding what you’re giving up destroys valuable negotiating leverage. Refusing to cooperate when it could help your case wastes your best chance at a reduced sentence.
The government has former IRS agents, forensic accountants, and unlimited resources to build their case against you. You need a defense team that understands federal tax prosecution – not a general practitioner who handles DUIs and divorces. At Spodek Law Group, we’ve represented clients in complex federal cases for decades, including cases that others said couldn’t be won.
We’re available 24/7 to discuss your situation and explain your options. The consultation is risk-free, and there are no time limits – ask anything you need to ask. We’ve handled tax cases ranging from simple failure-to-file charges to sophisticated international evasion schemes involving offshore accounts and shell corporations.
The difference between 40 months in federal prison and probation often comes down to decisions made early in the case – before charges are filed, during the investigation phase. Don’t wait until sentencing to start thinking about how to reduce your exposure. Contact us now.