For years we have claimed that the IRS operates the nation’s best publicity machine. Whenever someone is indicted for tax evasion, refund fraud or other criminal tax case the IRS is there with a press release and some great sound bites for the media.
The IRS doesn’t act alone. Usually IRS news bulletins outlining criminal tax charges are mirrored by press releases from the Justice Department and the local U.S. Attorney’s Office. There is nothing sinister about having good media relations, unless only one side of the story is reported.
Earlier this week a column in the Wall Street Journal titled “Mum’s The Word About SEC Defeats” addressed a similar phenomenon at the SEC. The government is quick to publish stories about indictments and prosecutions but is remarkably silent when the defendant wins and the agency loses.
As a lawyer representing defendants in federal IRS criminal tax cases, we love when spring rolls around. Timed to coincide with filing season, the IRS and Justice Department usually team up to roll out a number of criminal tax indictments across the country.
Why? Because stories of individuals being charged by the IRS is a reminder to all those folks that each year have second thoughts about properly filing and paying taxes. Admit it, no one likes paying taxes. And many think it’s okay to cut corners here and there. Reading about your neighbor who is facing 20 years in the federal pen is enough to keep 99% of us honest, however.
The IRS operates on a voluntary compliance model. There simply aren’t enough revenue agents and criminal division special agents to check everyone’s return and prosecute every criminal tax violation. So the government makes sure to ramp up its publicity machine, especially during filing season.
In the IRS’ case, that is the job of the IRS National Media Relations Office. We believe they do a better job than any ad agency or private sector business in the nation. Big business pours millions into expensive ad campaigns. The IRS and DOJ simply issue a one-page press release talking about how so and so was just indicted and faces years in prison and hundreds of thousands in fines. A simple press release detailing a local criminal tax charge usually gets plenty of media play.
Letting the public know that there is a consequence of not paying taxes is good. The IRS has the responsibility to tell the complete story, however. Although the Justice Department employs some of the best and brightest trial lawyers in the country, they do lose cases. Remarkably, there are no press releases from either agency when that happens.
According to the Wall Street Journal column, the SEC operates in a similar manner. In this day of instant information, the government has a duty to tell the whole story. Reputations can be ruined when incomplete information is on the web. While third party news sources – media and blogs – might not know the entire story, the IRS does and should report accurate information. That includes sentences that don’t involve prison too.
I had the opportunity to be present for the 2008 Wesley Snipes trial in which a jury acquitted Snipes on all the criminal tax felonies and even some of the misdemeanors. Ask any IRS agent or prosecutor present at the trial and they will tell you it was a major defeat for the government. The press folks at IRS and DOJ? Of course not, they claimed “victory” when Snipes was sentenced on the three remaining minor misdemeanor charges.
The purpose of this blog isn’t to trash the IRS or Justice Department. They have a difficult job with very limited resources. Using the press release process effectively is key to insuring voluntary compliance. (It is impossible for the IRS to prosecute even 1% of the criminal tax frauds that occur yearly.) Because we are living in a digital age where reputations are on the line, however, it is important to report the rare defeats as well as the victories.
That’s our two cents.
The tax lawyers at Mahany & Ertl protect the liberty of those charged with criminal tax violations including tax evasion, filing false returns, money laundering, failure to file, failure to pay and conspiracy to defraud the government. If you are facing prison or believe that an audit may uncover problems that could turn criminal, give us a call.
All inquiries are kept in strict confidence and protected by the attorney-client client privilege. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Services available in many jurisdictions.