Hunter Biden’s Next Plea Deal

After Attorney General Merrick Garland elevated David Weiss to special counsel status in the Hunter Biden investigation last week, it raised the question: Where is the case going next? The move is the result of the spectacular collapse of the plea deal the Delaware U.S. attorney had previously struck with the president’s son. Now Weiss needs additional leverage over Hunter Biden. The move gives him the option to charge Biden with tax felonies in a different jurisdiction and to perhaps compel Biden’s team back to the table, under far less favorable terms.

No one really wants to deal with the time, expense, inconvenience, and high risk of a trial, but sometimes the very real threat of a trial is exactly the right impetus for both sides to engage in serious plea negotiations.

The special counsel seems likely to elevate Hunter Biden’s previous two failure-to-pay misdemeanor counts to felony willful failure to pay taxes or evasion of income tax payment charges. Weiss, however, might be looking to force a new plea deal, rather than actually take such a case to trial. Remember that Biden originally did not pay his taxes due allegedly to his addiction issues and alcoholism, and after some starts and stops, he ultimately complied after a friendly benefactor loaned him the money to pay his back taxes and interest in full. That payment left the government with a technical criminal tax case based on the fact that Hunter did not originally pay his taxes in full and on time. The IRS, when confronted with similar fact patterns in the past, has opted to treat the tax issues via civil enforcement remedies and assert interest and late filing penalties as appropriate punishment. (One additional civil option in such a case would be to assert the civil fraud penalty which could run as high as 75 percent of the tax payments in question.)

But the IRS deemed Hunter Biden’s level of intent sufficient to open a criminal investigation and is reported to have recommended criminal prosecution on felony charges. Weiss’ office thought a misdemeanor plea agreement was appropriate, but Delaware District Judge Maryellen Noreika found the terms of the agreement lacking and sent the parties back to the drawing board. No new agreement was reached, and here we are, with both sides looking at the potential for a felony trial. Should the special counsel opt to charge felony tax violations in this reset, he will be required to produce evidence of willful intent with regard to Biden’s failure to pay. Failure to pay taxes is generally a misdemeanor case, but it can be elevated to a felony evasion-of-payment charge if there exists sufficient evidence of that willful intent.

Simply stated, can Weiss prove that Biden, in the grip of alcoholism and addiction, possessed the requisite level of criminal intent to concoct and commit a tax fraud scheme over a period of years to willfully defraud the IRS? That is the crux of the matter that would go before a court and jury, likely in California, where the tax crimes were committed or where the taxes should have been paid, should the special counsel go ahead with his indictment and the Biden legal team opt to take its chances in trial instead of negotiating a plea.

There are risks to any litigation, and both sides have good arguments here, but both sides also have weaknesses in their respective positions. The possibility of resuming plea talks and escaping trial will be difficult for either side to ignore. The special counsel won’t want an acquittal after all the years that the DOJ has invested in the Hunter case. At this point, though, the DOJ is going to want more than the initial plea deal of two misdemeanor tax charges plus pretrial diversion on a gun charge that the Delaware judge axed. Meanwhile, the possibility of going to jail seems likely to petrify Hunter Biden. Pleading to a felony would also likely mean that he would lose his license to practice law, which is no small concern. What might entice him to take a deal?

One potential resolution could look like this: The government could offer, and the Biden team might accept, a plea to one count of subscribing to a false tax return in addition to one count of making a false statement regarding his 2018 gun purchase. (It is a crime to possess a gun as a user of a controlled substance.)

What about the sentencing? Felony tax evasion carries a maximum jail sentence of five years. The maximum prison sentence for subscribing to a false tax return, though, is just three years, and therein lies the potential for compromise. Hunter Biden has already paid—thanks to a friendly loan—all of his back taxes due and owing, including interest for the years in question, so the government has arguably no longer suffered any harm. Sentencing on tax charges generally relies on the amount of unpaid taxes for a baseline sentence calculation, though. Biden will undoubtedly agree to make a full acceptance of responsibility with regard to his crimes, which will provide him with a significant downward departure in the sentencing guidelines. He also has no felony history to muddy the sentencing waters or cause an upward departure to the sentencing guidelines.

False tax return charges are the most frequently used criminal charges in IRS criminal investigations. I have encountered many false return cases that ended up with sentences to serve that could be counted in months, not years, and often in the single digits. Add one more month for the false statement about not using drugs when buying the weapon, and you should have the basis for a deal. Those on Biden’s legal team could then negotiate a Club Fed prison stay to allow their client to work on his paintings and tennis strokes for a few months before getting out.

This projected plea gets the government the scalp some in the media, some in Congress, and part of the public so clearly want. In the end, although the process has indeed been messy, the rule of law will prevail, the whistleblowers will get what they say they want, tax enforcement is bolstered, and justice will have been done.