March 15, 2018
The Tax Division of the Department of Justice has long sought to maximize the impact of criminal prosecutions by focusing its limited resources on a small number of high-profile offenders in the hopes that publicity regarding such prosecutions will lead others to comply with their tax obligations. As a logical extension of this principle, it is commonly accepted that general deterrence is a significant consideration in sentencing convicted tax offenders. In this article, we discuss how the recent reductions in the Internal Revenue Service’s enforcement budget has negatively affected the number of tax investigations and prosecutions, heightening questions regarding the fairness of ratcheting sentences of convicted tax offenders even higher to offset the loss of deterrence resulting from reduced enforcement activity.