Federal Criminal Restitution & the IRS: What You Must Know Before Pleading Guilty

Hey, this is Elizabeth, and I want to tell you a little bit about restitution that you may not have considered, but that you should know before you take a case either to trial or plead guilty in federal court. A restitution order in your case may impact whether you can work with other government agencies to resolve your financial obligations. So, for example, let's say you were convicted of fraud against the IRS. Normally, if you have a debt obligation with the IRS, you can work with them with what's called an offer in compromise. That means you can settle what is owed for less than what is owed if you can agree with them on a number and on the payment terms. If, however, you have a restitution judgment in your criminal case, the IRS will not work with you to resolve that issue. The IRS's position is going to be that the court judgment controls and that they cannot, they don't have the ability to enter into sort of an offer and compromise with you. Now, where this really gets bad though is when the IRS continues to levy fines and penalties against you for not resolving the money that's owed. So let's say, for example, that you owe the IRS $50,000. The restitution judgment says that you must continue paying the IRS the $50,000 that you owe at $500 a month until it's paid off. Well, the IRS is going to continue to levy penalties against you because you haven't paid off what's owed, and until all that is paid off, you're at risk of their seeking enforcement by way of a federal lien in the counties where you have property. So all this is to say that when you're dealing with criminal issues that involve restitution, it is exceedingly important to continue to consider some of the issues that can arise. These issues will continue to follow you even after you serve your sentence and probation. They can impact your financial stability for you and your family for a very long time. If you have any questions about this, please feel free to call our office at 803- 331-3421, and a member of our team will be more than happy to assist you. Thank you.