Criminal Tax Restitution, Fines and Forfeiture
Quick Answer
Criminal tax sentencing includes four financial consequences: (1) restitution — mandatory repayment of tax loss; (2) fines — up to $250K per count typically; (3) forfeiture of proceeds from tax fraud; and (4) civil tax liability with interest and civil fraud penalty still applicable. The short version is that criminal conviction doesn’t eliminate civil tax owed. In our experience, defendants often focus on prison but overlook the lasting financial consequences that persist long after release.1
Restitution question? A 15-minute consultation is free.
Four financial consequences of criminal tax conviction.
The Four Criminal Tax Financial Consequences
| Consequence | Authority2 |
|---|---|
| Restitution | 18 USC §3663A MVRA |
| Fines | Per statute + §3571 |
| Forfeiture | 18 USC §981/982 |
| Civil Tax | Civil fraud + interest |
Quick Reference
Jump to: restitution, fines, forfeiture, or civil.
1. Restitution
Mandatory repayment of tax loss per MVRA.
If this is you: Convicted of tax crime. Mandatory Victims Restitution Act (MVRA) — full tax loss repayment. Ordered at sentencing. Enforceable as judgment.
Restitution Strategy
- Challenge tax loss calculation.
- Identify legitimate offsets.
- Negotiate scope.
- Plan payment schedule.
- Preserve assets for civil tax.
2. Fines
Up to $250K per count typically (§3571).
If this is you: Convicted. Fines per 18 USC §3571. Typical felony: up to $250K. Misdemeanor: up to $100K. Discretionary within range.
3. Forfeiture
Forfeiture of proceeds of tax fraud.
If this is you: Benefits from tax fraud forfeited. Cash, property, accounts. Civil or criminal forfeiture procedures.
4. Civil Tax Liability
Tax + interest + 75% civil fraud penalty still apply.
If this is you: Criminal conviction establishes civil fraud. Civil tax + interest + 75% fraud penalty. Not dischargeable in bankruptcy.
Criminal conviction? Book consultation.
Restitution Document Lookup
| Authority | Purpose |
|---|---|
| 18 USC §3663A (MVRA) | Mandatory restitution |
| 18 USC §3571 | Fines |
| 18 USC §981 / §982 | Forfeiture |
| IRC §6663 | 75% civil fraud penalty |
| PSR | Pre-sentence report |
Restitution Statute
- Restitution enforceable 20 years (like judgments).
- Civil tax statute preserved.
- Not dischargeable in bankruptcy.
Restitution Patterns
| Situation | Outcome |
|---|---|
| Negotiated restitution | Specific amount |
| Government calculation | Full tax loss |
| Cooperation credit | Possible reduction |
| Multi-year cases | Substantial total |
Restitution Process
PSR
Pre-sentence report calculates.
Sentencing
Court orders restitution.
Enforcement
Collection post-sentence.
First 48 Hours After Conviction
- Review PSR restitution calculation.
- Identify challenges.
- File PSR objections.
- Negotiate scope.
- Plan civil tax response.
The ROI Question
Restitution + fines + civil tax can exceed original tax many times. Careful calculation challenge saves real money.
Under Criminal Tax Investigation?
If you know or suspect the IRS Criminal Investigation division is looking at you, the time for routine tax advice is over. What you say and do in the early stages matters significantly — and the window for voluntary disclosure closes the moment CI makes contact. If you’re in this situation, get counsel before you respond to anything.
Get Criminal Tax Counsel → Or call: (619) 378-3138
When to Engage
- Pre-sentencing.
- PSR review.
- Restitution challenge.
- Post-conviction civil.
Frequently Asked Questions
What is restitution?
Mandatory repayment of tax loss under MVRA (18 USC §3663A). Ordered at sentencing for tax crimes. Enforceable as federal judgment for 20 years.
What are fines?
Up to $250K per felony count under §3571. Up to $100K misdemeanor. Court discretion within range. Stacked across counts.
What is forfeiture?
Government seizure of proceeds from tax fraud. Cash, property, accounts. Separate from restitution. 18 USC §981 / §982.
Does civil tax still apply?
Yes. Criminal conviction doesn’t eliminate civil tax. Tax + interest + 75% civil fraud penalty. Civil exam continues.
Is restitution deductible?
Generally no under current law. Tax loss restitution = the tax owed. No double benefit.
Can I challenge restitution amount?
Yes at sentencing. PSR contains calculation. Object to errors, inflation, misattribution. Evidence-based challenge.
How long to pay?
Payment schedule set by court / probation. 20-year enforcement period. Monthly payments typical.
Can I discharge in bankruptcy?
No. Restitution and most criminal tax obligations non-dischargeable. Permanent liability.
What about interest on restitution?
Interest accrues per statute. Post-judgment interest rate. Compounds over time.
Can cooperation reduce restitution?
No. Cooperation affects sentence, not restitution amount. Restitution = tax loss.
What’s the PSR?
Pre-sentence report. Prepared by probation. Calculates guidelines, restitution, sentencing factors. Defense objection opportunity.
Does plea affect restitution?
Plea agreements can address but cannot waive. Court retains authority. Negotiation possible.
What happens post-release?
Restitution continues. Supervised release conditions may include payment. Civil enforcement via IRS collection.
Next Steps
Restitution question? 15-min consultation free.