At the beginning of the trial, the prosecution gives an opening statement to the court and, if a jury trial, the jury. The defense follows. Opening statements primarily advise the court and/or jury what each party intends to prove. In some judicial districts, no opening statement is made. The defense may decline to make an opening statement or defer opening until the completion of the government's investigation. Usually the prosecution will explain each count of the indictment and then outline the evidence to support it. Generally, where defense counsel elects to make an opening statement at the outset, the defense counsel will explain to the court and/or jury that the defendant need prove nothing, that the defendant's plea of not guilty is a denial of all the charges, and that the court and/or jury should keep an open mind until the entire investigation is presented.

The government goes first in presenting proof of the offenses charged. It does this by questioning witnesses and introducing documentary evidence. Upon conclusion of the direct examination of each witness by the attorney for the government, the witness is turned over to the defense counsel for cross-examination, if defense counsel so desires. After cross-examination, the government has the opportunity for redirect examination as to matters brought out on the cross-examination. Upon the conclusion of the government's investigation, the prosecution rests and the defendant then has the burden of going forward with the evidence. The prosecution may cross-examine defense witnesses and, after the defendant rests, may offer proof in rebuttal.

A stipulation is an agreement between the prosecuting attorney and defense counsel on certain facts in the investigation so as to expedite the trial by eliminating the introduction of evidence to prove undisputed facts. For example, the defense may admit the receipt of income, the acquisition of certain assets, the making of specified expenditures, or even the source and amount of income and the tax deficiency alleged. This agreement then relieves the government of the burden of producing sufficient evidence to prove such matters and would leave willfulness as the only real issue to be proved. Since willfulness is usually inferred from the manner in which transactions are handled and proven by the testimony of a number of witnesses that dramatizes the defendant's knowledge (thereof), the government exercises great care in agreeing to stipulations in investigations involving willfulness.

Stipulations are generally agreed upon and submitted to the court in writing prior to trial; however, they may be stated orally in open court and recorded by the court reporter during the trial.

After the evidence on either side is closed, the court, by way of a motion made by the defendant or on its own motion, shall order the entry of a judgment of acquittal of one or more offenses charged if the evidence is insufficient to sustain a conviction. The motion may be made orally or in writing. In some circuits, the motion will be denied if the trial judge determines that the evidence, taken in the light most favorable to the government, tends to show that the defendant is guilty beyond a reasonable doubt. In others it will be denied if the evidence is enough to send the investigation to the jury in a civil action.

If the motion for acquittal is made by the defense upon the conclusion of the government's investigation and is denied, the defendant may proceed by introducing evidence in his/her own behalf. This waives any objection to the denial. The defendant may renew the motion for judgment of acquittal after both sides rest. A failure to do so may foreclose any right on appeal to question the sufficiency of the evidence to sustain the conviction.

The trial court may reserve its decision on this motion, submit the investigation to the jury, or decide the matter before a verdict is reached, after it is announced, or after the jury is discharged without reaching a verdict.

After the defense rests, the prosecution may offer proof in rebuttal to explain, counteract, or disprove the defendant's evidence. For example, after a defendant testified that he made substantial payments to a deceased brother-in-law for services rendered, the government put into evidence the brother-in-law's tax return, which did not include any such amount, in order to discredit the defendant.

Either party or both may file with the court written instructions regarding the law to be given the jury. The court will inform counsel of its proposed action on their requests before their arguments to the jury. It is sufficient if the substance of the requested instructions is given. Closing arguments are then presented to the jury.

The court then instructs the jury as to the law. Any objection to the proffered instructions or any omissions must be made before the jury retires to consider its verdict. Failure to request special instructions, or to make specific objections to the charge before the jury retires, constitutes a waiver of any such request or objection on appeal unless, under Fed Rule Crim Proc 52(b), there are "plain errors or defects affecting substantial rights. . . ."

The conclusion of the jurors is the verdict. It must be returned to the judge in open court and must be an unanimous decision to convict or acquit. Where there is more than one defendant, the jury may return a verdict or verdicts with respect to a defendant or defendants. If the jury cannot agree regarding any defendant, he/she may be tried again.

Where the indictment contains more than one count, each count is considered as if it were a separate indictment so that acquittal on one or more counts will not generally be considered inconsistent with conviction on others.

The defendant may be found guilty of an offense necessarily included in the offense charged, or of an attempt to commit either the offense charged or an offense necessarily included if the attempt constitutes an offense. The Supreme Court has indicated that, where some of the elements of the crime charged themselves constitute a lesser crime, the defendant, if the evidence justifies it, is entitled to an instruction which would permit the jury to return a guilty verdict as to the lesser offense. However, where the facts necessary to prove the crime charged are identical with those required to prove the lesser offense, the defendant is not entitled to an instruction which would permit the jury to make a choice between the two crimes in returning its verdict.

The trial court will poll the jury at the request of either the government or the defense, or upon its own motion, in order to be certain the verdict is unanimous. If there is not unanimous concurrence, the jury may be directed to retire for further deliberations or may be discharged.

A judgment of conviction must set forth the plea, the verdict or findings, the adjudication and the sentence. It must be signed by the judge and entered by the clerk.

In a criminal investigation, a defendant's notice of appeal must be filed in the district court within 10 days after the later of:

When the government is entitled to appeal, its notice of appeal must be filed in the district court within 30 days after the later of:

Appeals from the decisions of the Federal district courts are heard in the Court of Appeals for the appropriate circuit, except for certain statutory exceptions that permit the government to appeal directly to the Supreme Court.

The Secretary of the Treasury or the Secretary's delegate may compromise any civil or criminal tax investigation prior to its referral to the Department of Justice (26 USC §7122(a)). The Secretary has delegated this authority to the Commissioner of Internal Revenue, see IRM 9.5.13, Civil Considerations. Strict compliance with the statutory provisions is required to effect a compromise. Accordingly, attempted settlement by subordinate IRS officials will not bar criminal prosecution. A valid compromise is as complete a discharge from prosecution as an acquittal by a jury.

Criminal Investigation pursues offers in compromise in investigations in which criminal proceedings are pending only when specifically requested by Criminal Tax Counsel. See IRM 9.5.13, Civil Considerations.

After referral of an investigation to the Department of Justice (DOJ), the authority to compromise rests with the Attorney General.

Tender of tax or actual payment prior to a verdict or plea of guilty is not a bar to criminal prosecution.

During trial, the special agent ordinarily may be present at the counsel table with the attorney for the government for assistance. The special agent may assist the government attorney by maintaining all government exhibits in proper order for ready reference and presentation, keeping a list of both government and defense exhibits as they are introduced, and checking to ensure that government witnesses are present and ready to testify.

The special agent may be called upon to prepare charts or schedules showing the taxpayer's sources of income, correct taxable income, or the related tax liability. The charts or schedules may reflect summaries of specific items, net worth increases, expenditures in excess of available resources shown on tax returns, or other transactions that lend themselves to visual presentation. In some instances, such summaries have been formally introduced in evidence; in others, they have been exhibited to the jury and, at the end of the investigation, used by the jury during deliberations. The need for charts, the type of charts, and the method of preparation will be affected by such considerations as the complexity of the investigation, the attitude of the court toward visual aids, the preferences of the attorney for the government, and available facilities.

The special agent should listen carefully to all testimony and alert the attorney for the government as to any false, misleading, or erroneous statements. The special agent may also assist in preparing questions to be asked defense witnesses on cross-examination.

The special agent should avoid any direct contact with the defendant at the trial in order to eliminate the possibility of any embarrassing or compromising situations arising. Likewise, association with defense counsel should be only in open court and with the knowledge and consent of the attorney for the government.

The court will usually instruct the jury against any contact with the attorneys or witnesses in the investigation. Any attempts by the special agent to associate with a member or members of the jury may cause a mistrial.

During the trial and after a verdict has been rendered in the investigation, the special agent should refrain from any demonstration of personal feelings in the matter.

Some courts on their own motion or on request of either counsel will bar from the courtroom all witnesses except the one on the stand. This involves preventing the prospective witness from:

If the order of exclusion is knowingly disobeyed, the court may in its discretion disqualify the witness.

If this rule is invoked, the court may at the request of the attorney for the government make an exception permitting necessary IRS representatives to remain in the courtroom to assist in the trial.

When a guilty verdict is rendered, the costs of the prosecution must be calculated. The attorney for the government will usually discuss these costs with the special agent before preparing the memorandum to submit to the court.

Upon defendant's conviction in a failure to file investigation, a trial court has no discretion but to impose the costs of prosecution as they are statutorily mandated pursuant to 26 USC §7203.

Title 26 USC §7203, states that, upon conviction, the defendant shall be fined or imprisoned, or both, "together with the cost of prosecution." Since similar language appears in 26 USC §7201, §7202, §7206, §7210, §7213, §7215, §7216, §7232, and §7241, it is probable that the costs of prosecution would be viewed in the same light by the courts when dealing with violations of those statutes. In addition, 28 USC §1918(b) provides that whenever any conviction for any offense (not capital) is obtained in a district court, the court may order the defendant to pay the costs of the prosecution. These statutes cover both mandatory and discretionary situations for assessing costs in criminal situations.

Whenever a conviction is obtained, the special agent should contact the probation officer assigned to prepare the presentence report and:

The Tax Reform Act of 1969 changed the name of the Tax Court of the US to the US Tax Court and included it as a court of record under Article I, Section 8, Clause 9, of the Constitution. It is now part of the Judicial Branch of Government. In addition to the powers it already possesses, the Court has been given the power to punish contempt of its authority and to enforce its decisions by the issuance of any writ, etc., that a District Court of the United States can issue. (26 USC §7441 – 26 USC §7456.)

In a US Tax Court, trial evidence is admitted and excluded much as it would be in a civil non-jury trial in the US District Court. In general, the Commissioner's determination of deficiency is presumed to be correct. (See Rule 32, Tax Court Rules of Practice). If the fraud penalty is asserted, the burden is upon the Commissioner to prove fraud with intent to evade tax. (26 USC §7454(a)). The evidence in that respect must be "clear and convincingly" ; not "beyond a reasonable doubt" as in a criminal investigation, but more than a mere preponderance. The failure of the Commissioner to prevail on the fraud issue does not relieve the taxpayer of the burden of overcoming the prima facie correctness of the determination of the deficiencies so long as the assessment was made within the applicable period of limitations.

Record of the disposition of the criminal investigation against a taxpayer is admissible in the US Tax Court on the issue of fraud. Despite an acquittal in a criminal investigation, the same evidence may be sufficient to prove fraud in the civil investigation. A conviction for attempted tax evasion in the district court is conclusive in US Tax Court proceedings as to the fraud issue. A guilty plea in a criminal investigation will be received by the US Tax Court as an admission to be given weight according to the circumstances. Without any explanation of the circumstances, it is sufficient to establish fraud. However, such a plea in a failure to file investigation may constitute only a willful omission and passive neglect to perform a statutory duty and not render the taxpayer liable for the fraud penalty.

The Commissioner is not barred from assessing the fraud penalty by the taxpayer's filing of amended returns, his/her payment of additional taxes due after the filing of fraudulent returns, or by his/her death, since the penalty relates to an offense against property rights and not personal rights.

The responsibility during investigation for the development of evidence to sustain the ad valorem additions to the tax (except those concerning tax estimations) rests upon the special agent. Consequently, upon the trial of a US Tax Court investigation where the fraud penalty is at issue, the special agent is often a principal witness for the government.

It is the duty of the special agent in the preparation for trial and the presentation of the investigation in US Tax Court to consult with and assist the attorney assigned to the matter by Division Counsel.