Federal Tax Fraud Defense Lawyer
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If You Were Just Arrested or Indicted for a Federal Tax Crime
A federal tax indictment moves fast at the start and slowly after that. Within days you will see a federal magistrate judge, and the court will set conditions for your release. In most white collar cases, people go home the same day on conditions such as surrendering a passport. Then comes the long part: months of discovery, motions, and negotiation before a plea or trial.
What you do in the first few days matters. Do not talk to agents, clients, co-defendants, or your accountant about the case. Anything you say can become evidence, and contacting witnesses can cost you your release. Hire a federal defense lawyer before your detention hearing and arraignment if you can. That lawyer’s first job is keeping you out of custody. The second is starting to take apart the government’s case, especially its claim that you acted willfully and its tax loss figure, which drives the sentence.
In the news: on September 22, 2026, a Dallas federal grand jury indicted four Texas residents for allegedly promoting sham trusts that sheltered more than $1.5 billion in income (U.S. Attorney’s Office, Northern District of Texas). It is one of more than 70 cases in a fall 2026 federal tax enforcement surge in North Texas. An indictment is only an accusation. Every defendant is presumed innocent.
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Four Board Certified specialists. Former prosecutors at the partner level. Our lawyers have been featured on 48 Hours, Dateline, Forensic Files, and Court TV. This is who handles your case.
What to Expect After a Federal Tax Arrest or Indictment
In the Northern District of Texas, tax cases are heard in federal court in Dallas, Fort Worth, and the district’s other divisions. The steps are the same in each.
- Arrest or summons. In white collar cases, many people are allowed to surrender by appointment instead of being arrested at home. A lawyer who is already involved can often arrange that.
- Pretrial services interview. A pretrial services officer asks about your finances, family, and history for a report to the judge. Be truthful and do not discuss the facts of the case. Ideally, your lawyer is present.
- Initial appearance. You appear before a magistrate judge, hear the charges, and the court addresses release.
- Detention hearing, if the government asks for one. It is usually held within a few days. In tax cases, prosecutors rarely seek detention unless they claim a flight risk, such as foreign accounts, a second passport, or large hidden assets.
- Conditions of release. These typically include surrendering your passport, travel limits, reporting to pretrial services, and no contact with witnesses or co-defendants. In promoter and preparer cases, the court may also bar you from preparing returns, selling tax products, or opening new financial accounts.
- Arraignment. You enter a plea of not guilty, and the court sets a schedule.
- Discovery. The government turns over its evidence: bank records, emails, returns, recorded interviews, and agent reports. In a shelter case this can mean millions of pages. Most of these cases are declared complex, which extends the 70-day Speedy Trial Act deadline.
- Motions and negotiation. Your lawyer challenges the charges, the evidence, and the government’s tax loss figure, and negotiates with prosecutors.
- Plea or trial. Most federal cases resolve by plea, but the terms depend on how strong the defense is. A credible trial threat is what moves prosecutors.
- Sentencing. If there is a conviction, sentencing usually comes three to four months later, after a presentence report.
What can happen alongside the criminal case
- Asset seizures and forfeiture. The government may freeze accounts or seek to forfeit property it ties to wire fraud or money laundering.
- Civil injunction suits. The Justice Department can sue to stop a promoter or preparer from operating.
- IRS civil examinations of you and your clients, for taxes, interest, and penalties.
- Professional licensing. CPA boards, the State Bar, and the IRS Office of Professional Responsibility can act on their own timelines.
Each of these interacts with the criminal case. What you say or file in one can be used in another, so they need to be managed together.
What to Do in the First 72 Hours
- Call a federal defense lawyer now, before the detention hearing or arraignment if possible.
- Say nothing about the case to agents, pretrial services, clients, co-defendants, employees, or family. Phone calls from jail are recorded.
- Do not contact witnesses, including clients who bought the product. That can violate your release conditions and lead to an obstruction charge.
- Do not move, spend, or transfer large sums. It can look like flight or concealment, and the money may be subject to forfeiture.
- Do not delete or change anything: emails, texts, files, trust documents, client lists. Preserve it all and let your lawyer handle it.
- Stop preparing returns or selling tax products until your lawyer advises you. Continuing can create new counts.
- Do not talk to your accountant about the case. Those conversations are not privileged. Your lawyer can hire an accountant under the attorney’s privilege.
- Gather what your lawyer will need: the indictment, any target letter or subpoena, the names of your prior advisers, and any legal opinions you relied on.
- Plan for the costs of the defense. If accounts are frozen, your lawyer can ask the court to release untainted funds for legal fees.
The Federal Tax Charges You May Be Facing
Tax cases rarely come with a single count. Prosecutors charge one conspiracy count, then a separate count for each false return, each year of evasion, each wire, and each large transaction. The Dallas shelter indictment has 24 counts across four defendants.
| Charge | Statute | What the government must prove | Maximum prison |
|---|---|---|---|
| Conspiracy to defraud the United States | 18 U.S.C. § 371 | An agreement to obstruct the IRS by deceit, plus one act by any member | 5 years |
| Aiding or assisting a false return | 26 U.S.C. § 7206(2) | You willfully helped prepare or advised on a return that was materially false. The client need not know it was false. | 3 years per return |
| Filing a false return | 26 U.S.C. § 7206(1) | You signed a return you knew was materially false | 3 years per return |
| Tax evasion | 26 U.S.C. § 7201 | Tax was owed, you took a step to evade it, and you acted willfully | 5 years per count |
| Willful failure to file a return or pay tax | 26 U.S.C. § 7203 | You were required to file or pay, knew it, and willfully did not | 1 year per year (misdemeanor) |
| Corrupt interference with the IRS | 26 U.S.C. § 7212(a) | Corrupt obstruction tied to a specific audit, summons, or investigation | 3 years |
| Wire fraud | 18 U.S.C. § 1343 | A scheme to get money by false statements, using email or wire transfers | 20 years per count |
| Transactions in criminally derived property | 18 U.S.C. § 1957 | A transaction over $10,000 with proceeds of another crime | 10 years per count |
| False statements to agents | 18 U.S.C. § 1001 | A knowingly false, material statement to a federal agent | 5 years |
Fines can reach $250,000 per count or twice the gain or loss, and courts order restitution of the tax loss. The maximums are not the likely sentence; the federal sentencing guidelines are. More on each charge: conspiracy, wire fraud, money laundering, false statements, and obstruction. If the case started with a false return of your own, see what can happen when you lie on your tax return.
How We Defend Federal Tax Fraud and Tax Shelter Cases
The government’s case almost always depends on two things: proving you acted willfully, and proving a tax loss large enough to drive a long sentence. Our defense goes after both, from the first day.
Willfulness: did you know it was illegal?
Almost every federal tax crime requires proof of a voluntary, intentional violation of a known legal duty (Cheek v. United States, 1991). An honest misunderstanding of the tax law is a defense, even an unreasonable one. Negligence and bad advice are not crimes. We build the evidence of good faith:
- Reliance on professionals. Did you give a lawyer or CPA the full facts and follow their advice? Promoters often hold legal opinion letters. We dig into who wrote them, what they were told, and why the defendant trusted them.
- Openness. People who use a strategy themselves, disclose it on their returns, and keep honest records rarely act like someone hiding a crime.
- Unsettled law. Where the tax treatment is genuinely debatable, it is hard to prove anyone knowingly broke a clear rule.
- Distance from the false facts. For aiding-false-return counts, the government must prove you knew each specific return was false. A distributor or preparer removed from a client’s actual numbers may not have known.
The tax loss: the number that drives the sentence
The government’s tax loss figure is often built on assumptions: that every dollar run through a trust was taxable, that no deductions were legitimate, that every client return was false. We retain forensic accountants, working under attorney privilege, to rebuild the numbers. Bringing the loss down can mean years off a sentence, even when guilt is not fully contested.
Keep Reading
The cooperating witnesses
Shelter cases are usually built on clients and former employees who face their own exposure and have every reason to say they were misled. Their deals, their prior statements, and their own tax histories are the core of cross-examination.
The legal challenges
- Statute of limitations. Most tax felonies must be charged within six years. Older returns may be outside the window.
- Obstruction limits. Under Marinello v. United States (2018), the obstruction charge requires a link to a specific audit or investigation that was pending or foreseeable. Ordinary return processing is not enough.
- Suppression and privilege. Statements taken without counsel, overbroad search warrants, and privileged communications seized in a search can all be challenged.
- Defective counts. Duplicate counts and charges that do not fit the conduct can be attacked before trial.
Resolution without trial, when it is the better path
Not every case should go to trial. When the evidence is strong, our job is the best available result: fewer counts, a lower tax loss, a plea to a charge with a lower maximum, credit for restitution paid early, or in some cases pretrial diversion. Prosecutors make those offers when they believe the defense is ready to try the case.
What Is at Stake at Sentencing
The sentence is driven by the tax loss and a handful of adjustments, not by the statutory maximums. For a promoter or preparer, the loss usually counts every client return they helped with, which is why promoter sentences can far exceed those of the clients who filed the returns.
| Factor | Effect |
|---|---|
| Larger tax loss | Higher guideline range, rising in steps as the loss grows |
| In the business of preparing returns or promoting the scheme | Increase |
| Sophisticated means (layered trusts, nominee accounts, offshore entities) | Increase |
| Leading or organizing others | Increase |
| Lying to agents, hiding records, or influencing witnesses | Increase |
| Timely acceptance of responsibility | Decrease |
| Cooperation with the government | Can support a motion for a lower sentence |
| Restitution paid early, age, health, family, and history | Grounds to argue for a sentence below the range |
Beyond prison, a conviction brings restitution to the IRS, forfeiture of fees and property tied to fraud or laundering, costs of prosecution, civil taxes and penalties, and loss of professional licenses. For scale, in the same North Texas enforcement surge, a return preparer who put false business losses on clients’ returns was sentenced to 57 months. Every case is different, and sentencing advocacy starts long before the sentencing hearing.
Not Charged Yet? The Best Time to Hire a Lawyer Is Now
Tax cases are built over months or years before anyone is indicted. Signs that you may be a subject or target:
- A civil audit that suddenly goes quiet, or an agent who stops returning calls
- A visit from an IRS Criminal Investigation special agent or the FBI
- A grand jury subpoena for you, your business, your bank, or your clients
- An IRS summons for your client list
- Clients telling you they were contacted by agents
- A target letter from the U.S. Attorney’s Office
At this stage, a lawyer can sometimes change whether charges are filed, what they are, and whether a proffer, a negotiated resolution, or diversion is possible. After indictment, those options narrow.
If you bought a tax shelter that is now under investigation
When a promoter is indicted, the government usually has the client list. Most clients are treated as witnesses or civil tax cases. The risk rises if you backdated documents, hid income, lied to agents, kept using the scheme after warnings, or recruited others. Before you talk to an agent, file amended returns, or apply for IRS voluntary disclosure, talk to a lawyer. Amended returns and interviews can be used as admissions, and voluntary disclosure is generally unavailable once the IRS already has information about you from another source, such as the promoter’s records. The IRS explains why sham trust arrangements fail in its guidance on abusive trust tax evasion schemes.
Why Clients Facing Federal Tax Charges Choose Varghese Summersett
- We try federal cases. Our lawyers have tried federal white collar and fraud cases in both the Dallas and Fort Worth divisions of the Northern District of Texas.
- We resolve them, too. We have obtained pretrial diversion for clients in white collar cases.
- We know how the government builds these cases. Managing partner Benson Varghese is Board Certified in Criminal Law by the Texas Board of Legal Specialization and has tried more than 100 state and federal criminal cases. Letty Martinez, also Board Certified in Criminal Law, served as a Special Assistant U.S. Attorney for the Northern District of Texas and spent more than 20 years as a prosecutor.
- We handle document-heavy cases. Shelter cases mean years of bank records, returns, and emails. We use current technology and forensic accountants to work through that volume.
- We manage the whole picture: the criminal case, the civil IRS exposure, forfeiture, and professional licensing, so one does not undercut the other.
Past results do not guarantee future outcomes.
Frequently Asked Questions
Will I go to jail after being arrested for a federal tax crime?
Most people charged with white collar tax crimes are released after their first court appearance on conditions such as surrendering their passport. Detention is more likely when the government alleges a flight risk, such as foreign accounts or hidden assets.
Should I talk to the IRS agents to clear things up?
No, not without a lawyer. Statements to agents are the most common evidence of willfulness, and a false statement is a separate five-year felony.
Can a return preparer be charged if the client signed the return?
Yes. Aiding or assisting a false return does not require the preparer’s signature, and the client does not have to know it was false.
Does a legal opinion letter protect a tax shelter promoter?
It can support a good-faith defense if the lawyer was given complete and true facts and the promoter actually relied on it. It does not help if the opinion was based on false facts or obtained only as cover.
How long does the government have to charge a tax crime?
Usually six years for the main tax felonies. A conspiracy can extend that, because the clock runs from the last act taken to carry it out.
Can a federal tax case be resolved without prison?
Sometimes. It depends on the tax loss, your role, your history, and how early the defense engages. Reduced charges, probation, and pretrial diversion are possible in some white collar cases. They are never guaranteed.
Is tax evasion the same as tax fraud?
Not exactly. Tax evasion (26 U.S.C. § 7201) is the felony of willfully trying to avoid the assessment or payment of a tax, and it carries up to five years per count. "Tax fraud" is the broader term people use for evasion, false returns, aiding false returns, and conspiracy. Schemes that steal identities to file fake returns and collect refunds are usually charged as wire fraud or identity theft instead, which changes the penalties and how the case is prosecuted.
How much does a federal tax defense cost?
It depends on the stage and the volume of evidence. A pre-indictment investigation, a plea, and a multi-week trial are very different undertakings. We will give you a clear fee structure at the consultation.
Talk to a Federal Tax Fraud Defense Lawyer
If you have been arrested or indicted, or have received a summons, a subpoena, a target letter, or a visit from an IRS special agent, talk to us before you talk to the government. Call (817) 203-2220 for a confidential consultation, or learn more about our federal criminal defense practice and our federal fraud defense team.