When You Can Challenge a Restitution Order

Federal restitution is part of a criminal sentence that orders the defendant to repay a victim's losses from the crime. For many federal crimes, including most fraud and theft offenses with an identifiable victim, the judge must order it (18 U.S.C. § 3663A). The amount can be challenged, and the payment schedule can change later.

This page explains federal restitution in general, then covers tax cases and how to challenge an order. It is general information, not legal advice for your case.

What is federal restitution?

Federal law has two main restitution statutes:

• Mandatory restitution. The Mandatory Victims Restitution Act (MVRA) requires restitution for a crime of violence, an offense against property under Title 18 (including fraud or deceit), and a few other listed offenses, when an identifiable victim suffered a physical injury or a money loss (18 U.S.C. § 3663A(a)(1), (c)(1)).
• Discretionary restitution. For other Title 18 offenses and some drug offenses, the judge "may order" restitution (18 U.S.C. § 3663(a)(1)(A)).

A fine is different. A fine is paid to the government as punishment. Restitution goes to the victim to repay a loss.

How does federal restitution work?

Restitution is set at sentencing, as part of the judgment.

• The PSR. If restitution is possible, the probation officer must gather enough information for the court to order it (Fed. R. Crim. P. 32(c)(1)(B)). The figure usually first appears in the presentence report.
• The amount. The court orders restitution "in the full amount of each victim's losses as determined by the court and without consideration of the economic circumstances of the defendant" (18 U.S.C. § 3664(f)(1)(A)).
• The payment schedule. The court then sets how and when payments are made, considering the defendant's assets, projected income and financial obligations, including to dependents (§ 3664(f)(2)).
• Enforcement. A restitution order is a lien in favor of the United States on all of the defendant's property, as if it were a tax (18 U.S.C. § 3613(c), (f)). A bankruptcy discharge does not wipe it out (§ 3613(e)–(f)).

What restitution can cover has limits. In Lagos v. United States, the Supreme Court held that the MVRA does not cover a victim's costs for its own private investigation or for civil or bankruptcy cases.

How long does federal restitution last?

The obligation to pay restitution ends on the later of 20 years from the entry of judgment or 20 years after release from prison (18 U.S.C. § 3613(b)). If the person dies, their estate is responsible for any unpaid balance.

Is restitution criminal punishment? Ellingburg

Yes, under the MVRA. On January 20, 2026, a unanimous Supreme Court held that MVRA restitution "is plainly criminal punishment for purposes of the Ex Post Facto Clause" (Ellingburg v. United States, 607 U.S. 163 (2026)). The Ex Post Facto Clause bars punishing a crime more harshly than the law allowed when it was committed.

The Court decided only that threshold question and sent the case back for the lower court to decide the rest. It also said its ruling "does not mean that a restitution statute can never be civil." Read our post on what Ellingburg decided and what it left open.

Restitution in federal tax cases

In a federal tax case, restitution pays the IRS the tax it should have received. You make the payments to the court clerk, usually over time, and the Justice Department monitors collection.

Federal Criminal Restitution

The IRS can assess and collect criminal restitution as if it were a tax. But in Klein v. Commissioner, 149 T.C. 341 (2017), the U.S. Tax Court held that the IRS may not add interest or failure-to-pay penalties to restitution it assesses this way.

The original article added that, before the IRS can assess more than the restitution amount, it must first go through a civil examination of what is still owed. In that process, the taxpayer can challenge the underlying amount and raise a statute of limitations defense to collection.

The restitution issue in United States v. Johnson

In a December 21, 2018 decision, United States v. Johnson, the Seventh Circuit upheld a restitution order in a tax case, and it held that the defendant gets credit for money the government later collects from the taxpayers involved.

Evelyn Johnson pleaded guilty to preparing false tax returns for her clients. She was sentenced to 18 months in prison and one year of supervised release.

She was ordered to pay $79,325 in restitution as a condition of her supervised release. That was the tax her clients avoided, on the counts of conviction, that the government had not yet collected from them.

On appeal, Johnson argued the government should have told the court how much more it expected to collect from her clients. She said that information was favorable evidence the government had to disclose under Brady v. Maryland, 373 U.S. 83 (1963).

The court disagreed. The presentence report showed the government had already collected large sums and was trying to collect the rest. Nothing was hidden, and Johnson could have asked for the current figure. Brady does not apply to information that is available for the asking.

The government also argued it could collect the full $79,325 from Johnson and keep whatever it collected from her clients too. The court rejected that. It held that Johnson gets credit against her restitution for amounts later collected from the taxpayers, under 18 U.S.C. § 3664(j)(2). Because of that credit, there was no need to disclose collection figures at sentencing. The restitution order was affirmed.

Can you challenge or reduce federal restitution?

You may not be able to avoid restitution after a conviction, but you may be able to challenge the amount. Restitution can be very hard to pay in full, especially if the government already seized valuable assets during the investigation, and especially after prison with few job prospects. The main points to raise it are:

• PSR objections. Ask for an itemized list of the victim's claimed losses and object in writing within 14 days after receiving the presentence report (Fed. R. Crim. P. 32(f)(1)). Check each item against what the law covers, as in Lagos.
• At sentencing and on direct appeal. Disputes about the amount should be raised at the hearing and, if needed, on appeal.
• Current collection figures. As Johnson shows, it pays to ask the government for its current figures before sentencing, so the order reflects what is actually still owed.

After sentencing, the options are narrower:

• Payment schedule. The defendant must tell the court and the Attorney General of any material change in economic circumstances, and the court may then adjust the payment schedule, or require immediate payment in full (18 U.S.C. § 3664(k)).
• Later civil recoveries. Amounts paid to a victim under the order are reduced by compensatory damages the victim later recovers for the same loss in a federal civil case, and in a state civil case to the extent state law provides (§ 3664(j)(2)).

Common questions

What is federal restitution?

It is part of a federal criminal sentence that orders the defendant to repay the victim's losses from the crime. For crimes of violence and offenses against property, including fraud, with an identifiable victim who was injured or lost money, the court must order it (18 U.S.C. § 3663A). For many other federal offenses, the court may order it (18 U.S.C. § 3663).

How does federal restitution work?

The judge sets the amount at sentencing, in the full amount of each victim's losses without regard to the defendant's ability to pay, and then sets a payment schedule based on the defendant's finances (18 U.S.C. § 3664(f)). The order is a lien on the defendant's property in favor of the United States (18 U.S.C. § 3613(c), (f)).

How long does federal restitution last?

The liability ends on the later of 20 years from the entry of judgment or 20 years after release from imprisonment (18 U.S.C. § 3613(b)). If the person dies before paying in full, the estate is responsible for the unpaid balance.

Can federal restitution be reduced?

The amount should be challenged before and at sentencing, through objections to the presentence report (Fed. R. Crim. P. 32(f)), and on direct appeal. After sentencing, the court can adjust the payment schedule if the defendant's economic circumstances materially change (18 U.S.C. § 3664(k)), and amounts owed to a victim are reduced by compensatory damages the victim later recovers for the same loss (§ 3664(j)(2)).

Facing a federal sentence? Request a consultation and tell us what happened.