Overview of the United States Procedural Aspects of the Criminal Tax System.
Phase (2). DOJ Tax Approval Phase.
US DOJ (Department of Justice) Tax (Tax Section) authorizes all criminal tax prosecutions and sets national prosecution standards and priorities that further overall compliance with the federal tax system. In addition to its criminal tax role, DOJ Tax has principal authority for virtually all civil tax litigation except in the United States Tax Court. DOJ Tax Handles all tax trials in the District Courts, Bankruptcy Courts, and the Court of Federal Claims. DOJ Tax Handles all appeals (including appeals from the Tax Court) and all tax cases in the Supreme Court. Thus, DOJ Tax is well situated to coordinate national priorities in authorizing criminal tax prosecutions. It has authority to approve all tax-related indictments.
DOJ Tax is headed by an Assistant Attorney General. The Assistant Attorney General has a deputy with principal responsibility for criminal tax matters. Criminal Tax maters are handled by one of DOJ Tax’s Sections – the Criminal Enforcement Section. This Section’s attorneys are based in Washington. Criminal Enforcement Section divides its jurisdiction geographically, such as Southern subsection, Northern and Western Subsections, with additional cites in major cities, including New York, Los Angeles, San Francisco etc.
Upon receipt of the referral from CI (Criminal Investigation, the IRS’s branch that investigates tax crimes) DOJ’s Criminal Enforcement Section determines whether the case is within its prosecution enforcement priorities.
- The criminal tax enforcement system has limited resources. Therefore, it focuses on the strongest cases in which conviction is highly likely and picks targets with a sufficiently high profile such that the conviction will be publicized and will allegedly encourage compliance by persons of similar stature who would become aware of the convictions.
As such, DOJ’s Criminal Enforcement Section can decline to accept the IRS recommendation and return the matter to the IRS either for further investigation or with instructions to close out the criminal investigation.
- If, however, DOJ’s Criminal Enforcement Section approves further processing, it will usually forward the matter to the United States Attorneys’ Office for the district where the venue for criminal prosecution lies.