A federal tax crime is a willful violation of the federal tax laws, and the two charged most often are different offenses. Tax evasion under 26 U.S.C. § 7201 requires a tax due and owing, an affirmative act taken to evade or defeat it, and willfulness, and it is a felony punishable by up to five years per count.¹ A false-return charge under 26 U.S.C. § 7206 requires a return made under penalties of perjury that the taxpayer did not believe to be true and correct as to every material matter, and it carries up to three years per count.²

What makes a federal tax case distinct is the word willfully. A mistake, a disagreement over how the law applies, or a good-faith misunderstanding is not a crime; the government must prove that the person knew of the legal duty and voluntarily chose to violate it. That intent requirement is usually where the case is contested, because the records that show what a person knew and when are the same records that show whether the conduct was criminal or merely a civil dispute over what is owed.

Federal tax exposure is not set by a Texas grade ladder. It is set by the section charged, the statutory maximum that section carries, and then by the U.S. Sentencing Guidelines calculation, which on a tax case turns almost entirely on the tax loss attributed to the conduct. These are the variables that decide what a tax charge actually means.

Tax evasion

Evasion under Section 7201 is the most serious of the common charges. It requires proof of a tax due and owing, an affirmative act of evasion such as concealing income or filing a false document, and willfulness, and it carries up to five years per count.¹ Because each tax year can be a separate count, a multi-year case can stack significant statutory exposure.

Fraud and false statements on a return

A charge under Section 7206(1) reaches a return signed under penalties of perjury that the taxpayer did not believe to be true and correct as to a material matter, and it carries up to three years per count.² It does not require proof that any tax was actually evaded, only that a material statement on the return was knowingly false, which is why it is sometimes charged where the loss figure is contested.

The Guidelines and the tax loss

Within the statutory maximum, the U.S. Sentencing Guidelines calculate an advisory offense level, and the court must also weigh the sentencing factors in 18 U.S.C. § 3553(a).³⁴ On a tax case the offense level is driven by the tax loss tied to the conduct, with further adjustments where the government alleges sophisticated means or income from criminal activity. Because the loss figure moves the advisory range substantially, the tax loss the government can prove is the single most consequential fact in the case.

The people who face federal tax charges are usually not what the phrase tax crime brings to mind. They are small-business owners whose books and personal accounts blurred together, self-employed professionals who fell behind and papered over a gap, bookkeepers and return preparers, and people whose civil audit was referred for criminal investigation after an agent concluded the errors looked deliberate. Many have never been arrested before and learn the case exists only when a Special Agent appears or a target letter arrives.

The collateral exposure runs alongside the criminal case and outlasts it. A federal tax conviction is a felony that follows a person through professional licensing, employment, and security clearances, and it can be a deportable offense for a noncitizen. The civil side does not end with the criminal case either: back taxes, interest, the civil fraud penalty, and an accuracy-related penalty continue to be owed to the IRS after the criminal matter closes. That parallel civil exposure is part of what is at stake from the first day.

The criminal exposure is set by the section charged and the number of counts: up to five years per count under Section 7201, up to three years per count under Section 7206.¹² Within that range, the Guidelines calculation, driven by the tax loss, and the Section 3553(a) factors shape the sentence the court actually imposes.³⁴ Restitution to the IRS is ordered at sentencing,⁵ and a term of federal supervised release follows any custody.

There is no probation-style off-ramp that mirrors state deferred adjudication. The realistic questions are whether the tax loss the government attributes can be reduced, whether willfulness can be proven beyond a reasonable doubt, whether any search or summons enforcement holds up, and whether compelled civil materials tainted the criminal case. Detention is usually a smaller issue in a tax case than in a violent or drug case, but the release decision is still made under the Bail Reform Act at the first appearance.⁶ Outcomes turn on the specific record and are never promised.

A federal tax case is built from records, the returns at issue, the agent's workpapers recomputing them, summonsed bank statements, and recorded interviews, and what a person does early affects all of it. The most common and most costly mistake is talking with a Special Agent without counsel. Agents are trained interviewers, the conversation is evidence, and on a willfulness case an offhand explanation can become the proof that the conduct was knowing rather than mistaken.

A few steps help in nearly every case. Say nothing about the facts to a Special Agent, an auditor, or anyone else other than counsel, and route any contact through a lawyer. Do not alter, backdate, or discard any return, ledger, bank record, or email that bears on what the government is examining, because doing so can add an obstruction exposure far more serious than the tax count. Preserve every record in the condition it is in. Keep any target letter, summons, or charging paper. And understand that a civil audit and a criminal investigation can run at the same time, so a statement made to resolve the civil side can surface in the criminal case.

This is general information about how these cases work in Texas. It is not legal advice about any specific case, and reading it does not create an attorney-client relationship.

A federal tax case has a long quiet phase before it ever reaches a courtroom, and knowing the order of events makes the decision points easier to see. The matter is heard in the U.S. District Court for the Western District of Texas, San Antonio Division, and prosecuted by the U.S. Attorney's Office for that district after the Department of Justice Tax Division authorizes the charges.⁷⁸

IRS investigation and Tax Division review

The case begins inside the IRS Criminal Investigation Division, where a Special Agent develops a Special Agent Report. That report is reviewed by the Department of Justice Tax Division, which ordinarily holds a conference with the taxpayer's counsel before any indictment is approved, a meaningful opportunity to be heard while the case is still pre-indictment.

Initial appearance

Once the Tax Division authorizes prosecution and the grand jury returns an indictment, the person is brought before a U.S. Magistrate Judge for an initial appearance under Federal Rule of Criminal Procedure 5, where the charge and rights are stated and counsel is addressed.⁹ The release or detention decision is made under the Bail Reform Act, 18 U.S.C. § 3142.⁶

Discovery and motions

The government produces its evidence under Federal Rule of Criminal Procedure 16, supplemented by the prosecution's constitutional duty to disclose exculpatory evidence under Brady and credibility evidence under Giglio.¹⁰¹¹¹² Motion practice on suppression of overbroad warrant searches, on summons enforcement, and on the use of any civil-compelled materials happens here.

Plea or trial, then sentencing

A case resolves by a guilty plea taken under Federal Rule of Criminal Procedure 11 or by trial.¹³ At sentencing the court calculates the advisory Guidelines range, which on a tax case is driven by the tax loss, and weighs the factors in 18 U.S.C. § 3553(a) to impose sentence.³⁴

A federal tax case runs on a series of timing points, and the early ones decide what options remain and what evidence survives.

A tax case turns on willfulness and on the tax loss the government attributes, so those are the first two things Forrest Good PLLC works. The Special Agent Report and the IRS tax-loss calculation are read first because they frame the case the Department of Justice Tax Division authorized, and the returns at issue are read alongside the agent's workpapers that recompute them, line against line.

The tax-loss analysis is pressed because it is the single largest driver of the advisory Guidelines range.³ The components of the government's figure, gross-receipts adjustments, disallowed deductions, unreported income attributed to a particular source, and the year-by-year breakdown, are tested against the underlying books and records and pushed back on where the math does not hold. Suppression posture is examined on every warrant search and device seizure and on any summons enforcement, and where the government has used materials a taxpayer was compelled to produce on the civil side, that use is challenged. Brady and Giglio scrutiny is constant, applied to every cooperator, every accountant whose statement is in the file, and every former employee the government previews.¹¹¹² Where the case is still pre-indictment, the Tax Division conference and any written submission are prepared in full. The Presentence Investigation Report is reviewed line by line and met with specific written objections to an inflated tax loss and to enhancements the proof does not support. Parallel civil tax exposure is identified for the client and routed to civil tax counsel where appropriate, with the choices left to the client.

The hour estimate

Forrest Good PLLC estimates this matter at 80 to 200 hours of attorney time, billed at $250 per hour. The lower end reflects a single-year, single-count false-return case with a contained record; the upper end reflects a multi-year evasion indictment with a large books-and-records production, contested tax-loss and suppression litigation, parallel civil exposure, and a trial posture. The pricing methodology explains how the charging instrument, the evidence load, and the procedural stakes drive the estimate.

How the fee is set

This matter is priced by scoped consultation rather than a fixed flat fee, because the workload turns on the number of tax years at issue, the section or sections charged, the complexity of the tax loss, the pre-indictment or post-indictment posture, and whether the case resolves by plea or goes to trial, and those variables are only knowable after the indictment, the Special Agent Report or target letter, and the available records are reviewed.³ After that review, the engagement letter sets the scope and the fee for the matter in writing, still billed at the $250-per-hour rate for work beyond the scoped fee. The fee approach shown here is honored while this page is published, consistent with Texas Disciplinary Rule of Professional Conduct 7.02(d).¹⁴

Any work outside the scoped fee is billed at $250 per hour and is disclosed in the written engagement letter before it begins. The engagement letter is the binding contract for the matter.

The first step is a conversation. The initial 30-minute consultation with Forrest Good PLLC is free and is scheduled through the office's Google Booking page. It is the time to walk through the section charged or likely to be charged, the tax years at issue, the tax-loss figure the government is likely to argue, and the procedural posture inside the IRS and the Tax Division if the case is still pre-indictment. Bringing any target letter, summons, or charging paper and the returns and records already gathered makes the half hour far more useful.

No attorney-client relationship is formed until a written engagement letter is signed; the consultation itself carries no obligation.

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