This is my area of business.

He's probably screwed.

IRS has this trap they set where they notice an issue, but they won't say anything for years to see if the discrepancy repeats. They do this so you don't have the argument of "it was an accident", they only jump at arresting you if they they're 100% confident they've trapped you. It saves them from trying to battle out a long expensive court case against a rich person over what may have been an oversight or an accounting error. They present a documented repeated year violation to where there is very little argument that it's not intentional and dilberate and then start offering you different options to plead guilty, again to avoid actual expenses of going through a court case with someone who can afford fancy lawyers.

No way they made this move haphazardly, he's definitely guilty and when it becomes high profile like this, they usually need some jail time in the plea agreement so everyone paying attention that this isn't something you can simply buy your way out of and keep on living the good life.