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December 05, 2019 Articles

Federal Criminal Tax Charges and DOJ Tax Division Conference Requests

Always request a DOJ Tax Division conference as soon as it appears that your client may face federal criminal tax charges.

By Caroline Rule

Suppose that you have a client who can afford for you to travel to Washington, D.C., and who

  • is undergoing a sensitive, or “eggshell,” IRS audit that may lead to the matter being transferred from the civil side of the IRS to IRS Criminal Investigation (CI);
  • is already, or is likely to be, under investigation by CI;
  • is the target or subject of a grand jury investigation that may involve tax issues; or
  • is in any other way likely to be the subject of a federal criminal tax investigation.

If this is the case, you should immediately write to the Department of Justice (“DOJ”) Tax Division, Criminal Enforcement Section (“Tax Division”) and request a conference in the event that your client’s matter is referred there.

This is because, unlike all other federal crimes, tax crimes may not be prosecuted by a local U.S. Attorney’s Office without prior approval from the central DOJ. See 28 C.F.R. § 0.70 (authority over “criminal proceedings under the internal revenue laws” is assigned to the Assistant Attorney General, Tax Division); United States Attorneys’ Manual (USAM) § 6-4.200 (1997).

Importance of Request

You way wonder why it’s worth asking for a conference. The answer is that the conference provides a separate chance to argue that your client should not be indicted, apart from trying to persuade a local assistant U.S. attorney (AUSA)—who may not even agree to meet with you. While some Tax Division conferences are essentially “rubber stamps” for tax charges that an AUSA may want to bring, others are not; and one can, occasionally, “kill” a case completely at the Tax Division. Or one can persuade the Tax Division conferee that a lesser charge than that which the AUSA seeks is warranted. It sometimes happens that one persuades the Tax Division conferee that there is insufficient evidence against one’s client, but the conferee sends the matter back to the local level for further investigation. This can provide another opportunity to try to avoid an indictment. At the very least, the Tax Division conferee will tell you the statute and tax amount involved. There is certainly nothing to be lost by having the conference.

Timeliness of Request

Although a taxpayer does not have a legally enforceable right to a conference with the Tax Division before the Division decides whether to approves tax charges against the taxpayer, my firm’s many years of experience reveal that the Tax Division always grants a conference—but only if the taxpayer timely requests it. The conference is held in Washington, D.C. See USAM § 6-4.214 (“If time and circumstances permit, the Tax Division generally grants a taxpayer’s written request for a conference with the Division in Washington, D.C.”).

The earlier you request the conference, the better. Once the Tax Division approves charges, it is too late, and your only chance of talking the government out of prosecuting your client is to request a meeting with the local AUSA. See USAM 6-4.214 (“If the taxpayer makes the request for a conference after the Tax Division has forwarded the matter to the United States Attorney, the Tax Division will deny the request and suggest that the taxpayer ask the United States Attorney for a conference.”). So, our practice is to send in a Tax Division conference request as soon as it seems even a distant possibility that there may be a criminal tax charge against a client.

You may think that submitting a Tax Division conference request early in the development of a case sends a signal that your client is guilty and expects to be prosecuted. Over decades of experience, however, my firm and others in the field have confirmed that this is not so. Filing a conference request has absolutely no effect on how a criminal tax investigation proceeds. The conference request is entered into a computer, and only if a matter is referred to the Tax Division to approve prosecution does the DOJ then check whether the potential defendant’s name and Social Security number are in the system as having requested a conference.

Procedure for Request

Your conference request should be addressed to the section chief of whichever of the three DOJ Tax Division Criminal Enforcement Sections includes the state where your client resides. The three sections are as follows:

  • The Northern Criminal Enforcement Section, which includes Connecticut, Delaware, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Vermont.

    o   The section chief of the Northern Criminal Enforcement Section is Rosemary E. Paguni; her contact number is 202-514-0003.
  • The Southern Criminal Enforcement Section, which includes Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

    o   The section chief of the Southern Criminal Enforcement Section is Karen E. Kelly; her contact number is 202-616-3864.
  • The Western Criminal Enforcement Section, which includes Alaska, Arizona, California, Colorado, Hawaii, Illinois, Idaho, Indiana, Iowa, Kansas, Montana, Minnesota, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, Wisconsin, and Wyoming.

    o   The section chief of the Western Criminal Enforcement Section is Larry J. Wszalek; his contact number is 202-514-5762.

The conference request itself is very simple and should read along the following lines:


Rosemary E. Paguni [or whichever section chief you’re writing to]
Chief, Northern Criminal Enforcement Section
Department of Justice, Tax Division
601 D Street, NW
Washington, D.C. 20530

Re: T. Taxpayer, SS# xxx-xx-xxxx

Dear Ms. Paguni:

We are the attorneys for T. Taxpayer. The Internal Revenue Service Criminal Investigation division and/or the Department of Justice may be investigating Mr. Taxpayer for alleged tax-related offenses. In the event that this matter is referred to your office, we respectfully request a conference with your office.

To complete our file, we would appreciate your acknowledging receipt of this letter. Thank you.

                                                                                    Very truly yours,

                                                                                    L. Lawyer

In our experience, the DOJ Tax Division always responds with an acknowledgment letter.

If your client’s matter is referred to the Tax Division to approve tax charges, a Tax Division attorney will contact you to set up a conference. The lead time for a conference is usually only a couple of weeks or even less, however, so your possible arguments to the Tax Division should be in the back of your mind throughout a tax-related investigation.

Caroline Rule is a partner at Kostelanetz & Fink, LLP, in New York City. 

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