It is nearly an article of faith that, in negotiating a guilty plea to a Title 26 offense, the prosecutor and the CI agent working the case for the IRS will invariably agree to take into consideration in reaching a "tax loss" number for sentencing purposes a wide array of tax return considerations which effectively reduce the taxes due and owing. Chief among the considerations which traditionally serve to allow a reworking, and lowering, of the tax loss figure are deductions or credits which the target's attorney and/or accounting expert can identify as having been overlooked on the filed return. Occasionally, the argument that a target taxpayer should be allowed to alter filing status will serve to pave the way for agreement on a reduced tax loss.
But if plea negotiations fail, and the taxpayer now charged as a defendant pursues a similar formula for reducing "tax loss" before the court, the near-universal position of the federal courts is that those considerations are of no avail. In United States v. Clarke, 2009 U.S. App. LEXIS 6169 (11th Cir., March 20, 2009), the Eleventh Circuit joined the Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, and Tenth Circuits in holding that the "tax loss" calculated under U.S.S.G. § 2T1.1 is the loss intended by the defendant and not the actual loss to the IRS, precluding consideration of overlooked and recalculated deductions or credits, or for altered filing status. Only the Second Circuit (United States v. Gordon, 291 F.3d 181, 188 (2nd Cir. 2002)) requires the consideration of unclaimed deductions in calculating "tax loss" for sentencing purposes.