As many already know, the U.S. Sentencing Guidelines play a pivotal role in criminal cases, whether determining a client's pre-indictment exposure, negotiating plea agreements, evaluating presentence investigation reports, and when advocating for someone at a sentencing hearing. Since the Supreme Court's decision in United States v. Booker, the Guidelines are merely advisory, but they nevertheless still represent the “starting point” in any sentencing analysis and are required to be considered by the judge imposing sentence. 

For an extended period of time during the Trump Administration, the U.S. Sentencing Commission lacked the sufficient number of Commissioners needed to promulgate changes to the Guidelines.  That changed with the Biden administration, and, in February 2023, proposed amendments were finally issued.  Public comment on those proposals closed on March 14, 2023, and last month, the Commission voted to adopt a number of major changes to the Guidelines.  It is unlikely that Congress will take any action related to the proposed amendments and, should it not, they will automatically come into effect on November 1, 2023.  This will be the first time that the Commission has implemented amended Guidelines since 2018. 

The major Guidelines amendments relevant to white collar and criminal tax cases can be found in the changes to the compassionate release Guidelines and a new provision for “zero-point offenders.”  First, the compassionate release criteria will be expanded to cover more grounds for release pursuant to “extraordinary and compelling” circumstances, opening more doors to motions for early release for many current federal inmates.  Second—and perhaps most surprising—there will be a new offense level reduction for offenders who have no (or minimal) prior criminal history.  Of course, many individuals convicted of white collar and/or criminal tax crimes have never run afoul of the law before and will therefore automatically receive a two-point reduction to his or her total offense level under the new provision, Section 4C1.1, provided certain criteria are met (most “zero-point” offenders in non-violent financial or tax cases will easily meet the relevant criteria).  This provision will have an immediate benefit for these individuals: For example, a defendant convicted of a criminal tax offense (e.g., tax evasion, false returns, etc.) that involved a loss of over $550,000 (but less than $1.5m) would have, assuming he or she receives credit for accepting responsibility pursuant to a guilty plea, arrived at a total offense level of 17 and would have faced a resulting advisory range of imprisonment of 24-30 months.  Now, under new Section 4C1.1, the total offense level will be automatically reduced to 15, which carries an advisory range of 18-24 months' imprisonment.  While this might not seem like a monumental change at first, it is certainly a very meaningful difference to one facing a stint in federal prison. 

Perhaps unsurprisingly, at the recent ABA Tax Section May 2023 meeting in Washington, DC, a prosecutor from the DOJ's Tax Division announced that, in light of benefit defendants are expected to receive under new Section 4C1.1, prosecutors intend to seek reasons for Guidelines enhancements for aggravating factors in order to make up the difference.  Unfortunately, just how much of a benefit defendants will actually ultimately see from this new provision remains to be seen.