19. Restitution Plea Language

1. Defendant agrees to pay restitution to the Internal Revenue Service in the total amount of ___________________, pursuant to 18 U.S.C. 3663(a)(3). [1/] Defendant understands and agrees that this figure does not include interest under 26 U.S.C. § 6601, which will be assessed by the IRS pursuant to Title 26.
2. Defendant agrees that the total amount of restitution reflected in this agreement results from Defendant's fraudulent conduct.
3. The total amount of restitution consists of the following: [2/]

4. Defendant agrees that restitution is due and payable immediately after the judgment is entered and is subject to immediate enforcement, in full, by the United States. If the Court imposes a schedule of payments, Defendant agrees that the schedule of payments is a schedule of the minimum payment due, and that the payment schedule does not prohibit or limit the methods by which the United States may immediately enforce the judgment in full.
5. The IRS will use the amount of restitution ordered as the basis for a civil assessment under 26 U.S.C. § 6201(a)(4). Defendant does not have the right to challenge the amount of this restitution-based assessment. See 26 U.S.C. § 6201(a)(4)(C). Neither the existence of a restitution payment schedule nor Defendant's timely payment of restitution according to that schedule will preclude the IRS from immediately collecting the full amount of the restitution-based assessment. Interest on the restitution-based assessment will accrue under 26 U.S.C. § 6601 from the last date prescribed for payment of the tax liability that is the subject of the restitution-based assessment to the date that the IRS receives full payment.
6. Defendant is entitled to receive credit for restitution paid pursuant to this plea agreement against those assessed civil tax liabilities due and owing for the same periods for which restitution was ordered. Defendant understands and agrees that the plea agreement does not resolve the Defendant’s civil tax liabilities, that the IRS may seek additional taxes, interest and penalties from Defendant relating to the conduct covered by this plea agreement and for conduct relating to another time period, and that satisfaction of the restitution debt does not settle, satisfy, or compromise Defendant’s obligation to pay any remaining civil tax liability. Defendant authorizes release of information to the IRS for purposes of making the civil tax and restitution-based assessments.
7. Defendant understands that [ he/she ] is not entitled to credit with the IRS for any payment until the payment is received by the IRS.
8. If full payment cannot be made immediately, Defendant agrees to make a complete and accurate financial disclosure to the IRS on forms prescribed by the IRS (including, but not limited to, IRS Form 433-A and Form 433-B, as appropriate), and to disclose to the IRS any and all additional financial information and financial statements provided to the probation office. Defendant also agrees to provide the above-described information to the probation office.
9. If Defendant makes a payment of the restitution agreed to in paragraph [3] prior to sentencing, the payment will be applied as a credit against the restitution ordered pursuant to paragraph [3].  [3/]

PROVISIONS REGARDING PAYMENT

[As of May 2017, the Tax Division is encouraging a new payment option for restitution: the new and now generally preferred method is for the defendant to pay the IRS directly; in the alternative, the defendant can, as before, pay restitution to the court, which will forward the payments to the IRS. (Note that the Proposed Restitution Order form does not yet reflect this new payment option.) If there are non-government victims, payments should be made to the court, as non-government victims must be paid in full before any payments are made to the IRS. If the IRS is the sole recipient of restitution, payment directly to the IRS is preferable, as Title 26 interest accrues until payment is received by the IRS. The court is not an agent of the IRS for the purpose of receiving payment. If payments are made to the court, Title 26 interest will continue to accrue between the time payment is made to the court and the time payment is received by the IRS, which lag time can be significant. Select one of the following options:]

[Option 1: payment directly to the IRS (do not use if there are non-government victims)]

10. Defendant agrees to send restitution payments to the IRS at the following address:

IRS - RACS
Attn: Mail Stop 6261, Restitution
333 W. Pershing Ave.
Kansas City, MO 64108

11. With each payment to the IRS, Defendant will provide the following information:
    1. Defendant's name and Social Security number;
    2. The District Court and the docket number assigned to this case;
    3. Tax year(s) or period(s) for which restitution has been ordered; and
    4. A statement that the payment is being submitted pursuant to the District Court's restitution order.
12. Defendant agrees to send to the Clerk of the District Court and to the U.S. Attorney’s Office Financial Litigation Unit notice of payments sent directly to the IRS, at the following addresses: [insert appropriate addresses here]
13. A failure to send payments to the specific IRS address set forth in paragraph [ 10 ], or a failure to include all of the information listed above in paragraph [ 11 ], may result in a delay in the application of the payment or result in the IRS applying the payment in the best interest of the United States, including application to taxes or periods other than those identified in paragraph [ 3 ].

[Option 2: payment to court clerk (note: Title 26 interest accrues until payment is actually received by the IRS)]

10. Defendant agrees to send all payments made pursuant to the court's restitution order to the Clerk of the Court at the following address:
    [ insert appropriate address here]
11. With each payment to the Clerk of the Court made pursuant to the District Court's restitution order, defendant will provide the following information:
    1. Defendant's name and Social Security number;
    2. The District Court and the docket number assigned to this case;
    3. Tax year(s) or period(s) for which restitution has been ordered; and
    4. A statement that the payment is being submitted pursuant to the District Court's restitution order.

Defendant agrees to include a request that the Clerk of the Court send the information, along with Defendant's payments, to the IRS address below:

IRS - RACS
Attn: Mail Stop 6261, Restitution
333 W. Pershing Ave.
Kansas City, MO 64108

Defendant understands and agrees that interest imposed by Title 26 will continue to accrue until the payment is actually received by the IRS.

12. Defendant also agrees to send a notice of any payments made pursuant to this agreement, including the information listed in the previous paragraph, to the IRS at the following address:

IRS - RACS
Attn: Mail Stop 6261, Restitution
333 W. Pershing Ave.
Kansas City, MO 64108

NOTES

1/ If the defendant is not agreeing to pay a sum certain in restitution, i.e. the amount of restitution will be determined at sentencing, clearly identify the conduct for which the defendant is agreeing to pay restitution, including the relevant tax years and the names of any taxpayers. A defendant can agree to pay restitution for loss caused by conduct beyond the count(s) of conviction, but the plea agreement must specify the conduct. Ensure that the fact that the court may order the defendant to pay restitution is included in paragraph setting out defendant's awareness of possible punishment.

2/ Explain here (or refer to attached and incorporated documents), in as much detail as possible, the years, periods, and items for which the defendant has agreed to pay restitution. This sample chart is for use in a typical criminal tax case, where the defendant agrees to make restitution for his own personal past due income taxes. If taxes other than income taxes are involved, if other taxpayers or entities are involved, or if the restitution order is joint and several, additional information will be required. In cases involving additional taxpayers or entities, provide the court with a detailed chart that includes the names and Social Security Numbers of the relevant taxpayers, along with the loss for each tax period. The Tax Division recommends filing this information with a motion to seal that also informs the court that the information will be provided to civil IRS to permit the proper cross-referencing and crediting of the various accounts.

Because the IRS will assess and collect interest on the restitution-based assessment even if interest is not included in the restitution amount, there is no need to include interest as part of the restitution order or under 18 U.S.C. § 3612.  (Note that the Proposed Restitution Order form does not yet reflect this new guidance.) Penalties may be included in restitution if the defendant agrees to pay them.  Even if the defendant does not agree to pay penalties, they should be included where the object of the offense was the evasion of assessed tax, penalties, and interest.  In such cases, the restitution order should include, and separately state, the tax, penalties, and interest evaded.

If the defendant seeks to pay restitution in full before sentencing, the defendant must include Title 26 interest and any applicable penalties with the payment. Calculation of the interest must take into account that interest will continue to accrue until full payment is actually received by the IRS.

3/ [Alternative paragraph 9 where the amount of restitution ordered is to reflect pre-sentencing payments] If Defendant makes a payment of the restitution agreed to in paragraph [3] prior to sentencing, Defendant agrees that [he/she] will sign IRS Form 870, Form 2504, or other appropriate form enabling the IRS to make an immediate assessment of the liability underlying the restitution agreed to in paragraph [3].  Defendant agrees that [he/she] will not claim a refund of the payment or otherwise challenge the existence or amount of the tax liability underlying the restitution agreed to in paragraph [3].  If the amount of restitution identified in paragraph [3] has not already been reduced to account for any such payments, the government agrees that the amount of the restitution to be ordered by the court shall be reduced by a payment made in conformity with this provision.

Questions about restitution may be directed to Tax Division attorney Elissa Hart-Mahan, who may be reached at the general number for the Criminal Appeals & Tax Enforcement Policy Section, (202) 514-5396.

[updated May 2017] [cited in USAM 6-4.370; Tax Resource Manual 18]