section 6694(b) and "willful" tax fraud under 7201

The Stephen Barker case, reporeted on February 12, 2009, is fully uploaded below. Barker was conviced and sentenced for tax fraud. When you read this case, focus on the discussion of "willful" because that is the same word used in 6694(b). If one brings this point to its logical conclusion, facts that justify a 6694(b) $5,000 penalty may also support criminal tax fraud. This case is also interesting because the court appears to say that if the IRS can prove a person is "aware" of his tax obligations, that is enough to meet the "willfulness" term in tax fraud cases. The court used objective circumstancial facts (evidence) to show that "awareness." For that reason, this 8th circuit case should make it easier to get tax court convictions going forward. I found the rationale in this case to be a liberal interpretation of the word "willful." The taxpayer in this was a non-filier. That is not the point. The interesting part of this case is how the 8th ciruit currently looks are the term "willful." My point to the return preparation industry is that anytime you are confronted with a 6694(b) penalty, you need good representataion to make sure that the civil examiner does not refer the case to the IRS criminal investigation unit. The creative advocacy of the facts and circumstances can negate "willfulness." Negligence is a defense to tax fraud and "reckless" negligence is also a defense to tax fraud. The advocacy is to convince the IRS that the errors or omissions are negligence and not the "willful" intent to evade taxes or conspire to evade on behalf of a client. The IRS criminal examiners operate as "prosecutors" and "judges" of the facts their review. The criminal examinations are nightmares for clients and likely nightmares for return preparers if there is also a 6694(b) issue in the same case. The best way to avoid the issue is to make disclosure of the problematical issues to the IRS. I do not believe the DOJ can ever win a crimnal fraud conviction against a return preparer where the preparer has made a disclosure to the IRS.

United States of America, Appellee/ Cross-Appellant v. Stephen Richards Barker, Appellant/ Cross-Appellee.

U.S. Court of Appeals, 8th Circuit; 08-1067, 08-1250, February 12, 2009.

Affirming in part, vacating and remanding in part an unreported DC Minn. decision.

[ Code Sec. 7201]


A federal district court properly convicted an individual of willful tax evasion; however, his sentence was vacated and remanded for resentencing. The government was not required to refute the individual's good-faith belief that payment of taxes was voluntary because it presented sufficient evidence showing that the individual was aware of his obligation to pay taxes and acted willfully. However, the 42-month sentence of imprisonment imposed on the individual was remanded for resentencing because the court committed significant procedural error by concluding that tax evasion under Code Sec. 7201 was not a continuing offense. That error led the court to use an incorrect version of the sentencing guidelines manual, thereby resulting in a lower advisory sentencing guidelines range. Because tax evasion is a continuing offense, the date of the individual's last act of evasion was the date of the offense of conviction, which was to be used to determine the correct guidelines to calculate the advisory guidelines range.



Before: Murphy, Riley and Gruender, Circuit Judges.

GRUENDER, Circuit Judge: A jury found Stephen Barker guilty of four counts of tax evasion --evading and defeating the payment of income taxes, penalties and interest --in violation of 26 U.S.C. §7201, and the district court sentenced him to 42 months' imprisonment. Barker appeals his conviction, arguing that the Government's evidence was insufficient to prove that he acted willfully in light of his good-faith belief that he did not owe any federal income taxes. The Government cross-appeals Barker's sentence, arguing that the district court committed significant procedural error. For the reasons discussed below, we affirm Barker's conviction, vacate the sentence and remand to the district court for resentencing.



I. BACKGROUND

From 1994 to 1997, Stephen Barker worked in the investment-brokerage business and earned over $3,800,000 in personal income. During this period, however, Barker did not pay all of the federal income taxes that he owed. For the 1994 tax year, Barker underpaid his taxes by $9,650, and for the 1995, 1996 and 1997 tax years, Barker did not file any tax returns or pay any taxes despite owing $1,367,947. The Internal Revenue Service ("IRS") assessed Barker's unpaid taxes and interest for the 1994 tax year in August 1997, and it filed a tax lien in November 1997. The IRS assessed Barker's taxes and interest for the 1995, 1996 and 1997 tax years in December 1999, and it notified Barker that it intended to levy his assets in March 2000. Even after the IRS's assessments, tax lien and threat to levy his assets, Barker did not satisfy his tax debt. In July 2006, a federal grand jury returned an indictment charging Barker with four counts of tax evasion by evading and defeating the payment of his taxes, penalties and interest for each of the relevant tax years. Barker pled not guilty to the charges, and the case proceeded to trial.

In its case-in-chief, the Government presented evidence demonstrating Barker's tax liability, the IRS's assessment of his tax debt, and the IRS's unsuccessful efforts to collect from Barker. The Government also presented evidence of Barker's alleged efforts to willfully evade the payment of his assessed tax liability. In 1996, after Barker stopped paying his taxes, Barker and his wife created offshore trusts and business entities in the countries of Andorra and St. Kitts and Nevis. Barker owned and controlled these entities and had signatory authority over their associated financial accounts. Later, Barker hired three related companies, the Laughlin Group, the Privatech Group and the Nevis American Trust, to create domestic corporations and limited liability companies that would not appear to be owned by Barker but would, in fact, be controlled by him. Barker used these offshore and domestic entities as shells for receiving and holding his personal income. Barker continued to transfer his personal assets to these entities, even after the IRS assessed Barker's back taxes in December 1999 and notified him of its intent to levy his assets in March 2000. From March 2000 through at least December 2006, these entities held nearly all of Barker's personal assets, including $1.5 million from a personal disability benefits settlement, nearly $1.2 million in consulting income, automobiles, boats and homes. One particular entity, Shasta Property Management, Inc., held Barker's homes in Minnesota, Florida and Rhode Island.

The Government also presented evidence that before April 2003, the IRS began investigating and prosecuting members of Laughlin, Privatech and Nevis American for assisting others in evading taxes. After Barker learned of the IRS's investigation, he terminated his relationship with these companies. In an April 7, 2003 facsimile letter to Jim Fontano at the Privatech Group, Barker wrote:
This [investigation] may have jeopardized my business going forward. I don't need the IRS connecting me to Shasta, which they have now done, while I am going through a Collection Due Process Hearing and Tax Court on two separate matters from the late '90s. By seizing Laughlin's and your records, they can now make a lot of connections. I didn't pay major dollars for that to happen. Terry, Aaron and I have had more than one conversation about this type of scenario, and they assured me that a connection could never be made.

In this same letter, Barker directed Fontano to "please erase any files for Shasta." During a May 2003 interview with the IRS, Barker denied having any knowledge of or involvement with Shasta Property Management.

At the close of the Government's case-in-chief, Barker moved for a judgment of acquittal, arguing that the Government's evidence was insufficient to sustain a conviction for tax evasion because it did not prove that Barker willfully evaded and defeated the payment of federal income taxes. The district court denied Barker's motion.

In his case-in-chief, Barker did not dispute the Government's allegations that the IRS had assessed his taxes and that he had not paid them. Instead, Barker testified that starting in 1996, he developed a belief that according to certain provisions of the tax code, the payment of federal income taxes was voluntary. In 1999, Barker came to the additional conclusion that he was a nonresident alien not subject to federal income taxes because he was a citizen of the "United States of America" rather than the "United States" mentioned in the tax code. According to Barker, the "United States" of the tax code is an entity that governs only the District of Columbia, Puerto Rico and the Marinara Islands, and it is different from the "United States of America," which governs the fifty states. In 2003, Barker further supplemented his tax beliefs by subscribing to a "chargeback redemption strategy," by which he believed that he had satisfied any outstanding IRS debts. According to this strategy, a citizen may satisfy a tax debt by taking control of an account, which the United States Federal Reserve creates in each citizen's name at birth, and charging the tax debt against the funds in the account. Barker allegedly believed that this strategy discharged his tax debts because the account in the name "STEPHEN RICHARDS BARKER" was funded with between $500,000 and $1,000,000 at his birth fifty years earlier and had been accruing annual interest at a rate of six to eight percent since its creation. Barker also disputed the Government's evidence of his willfulness by testifying that his practice of keeping personal funds in foreign and domestic entities was innocent and done only to protect his personal assets from his litigious brokerage clients. The jury found Barker guilty on all four counts.

Prior to sentencing, the United States Probation Office prepared Barker's Presentence Investigation Report ("PSR"). In the "offense conduct" section of the PSR, the Probation Office chronicled Barker's acts of evasion, which continued through at least December 2006. The Probation Office then proceeded to calculate Barker's advisory sentencing guidelines range by first determining the applicable version of the United States Sentencing Guidelines ("U.S.S.G."). See U.S.S.G. §1B1.11(a)-(b)(1) (instructing courts to use "the Guidelines Manual in effect on the date that the defendant is sentenced" unless doing so would "violate the ex post facto clause of the United States Constitution," in which case the manual "in effect on the date that the offense of conviction was committed" should be used). Rather than using the December 2006 date for this determination, the Probation Office concluded that Barker's offense conduct occurred "through April 15, 1998," apparently relying on the date upon which his 1997 tax return was due.

Using the April 15, 1998 date, the Probation Office found that Barker's advisory sentencing guidelines range should be calculated using the November 1997 U.S.S.G. manual, the version effective as of April 15, 1998, instead of the November 2006 U.S.S.G. manual, the version effective on Barker's expected sentencing date, because using the November 2006 version would result in a higher guidelines range, thereby violating the Ex Post Facto Clause of the United States Constitution. See U.S.S.G. §1B1.11; U.S.S.G. amend. 617 (amending U.S.S.G. §2T1.1 to alter the definition of "tax loss" to include interest and penalties (in addition to the actual tax loss) for willful evasion of payment cases under §7201 and amending U.S.S.G. §2T4.1 to change the tax loss amounts in the tax table, effective November 2001). Using the November 1997 U.S.S.G. manual, the Probation Office calculated an advisory guidelines range of 37 to 46 months' imprisonment based upon the $1,377,597 tax loss under §2T1.1(a) and its corresponding base offense level of 19 under §2T4.1(N), a two-level increase under §2T1.1(b) due to Barker's use of sophisticated means of concealment, and Barker's criminal history category of I.

The Government objected to the PSR, contending that the Probation Office used the wrong version of the guidelines based on its improper conclusion that an evasion of payment offense under §7201 is not a continuing offense. Because evasion of payment is a continuing offense and because the PSR found that Barker's acts of evasion continued through December 2006, the Government argued that Barker's advisory sentencing guidelines range should have been calculated using the November 2006 U.S.S.G. manual under U.S.S.G. §1B1.11, resulting in a higher advisory guidelines range.

The Probation Office did not revise the PSR in response to the Government's objection, stating that "[t]he issue as to whether the instant offense is a continuing offense remains unclear." However, the Probation Office noted that
Should the Court concur with the Government, the Guideline Manual applicable November 1, 2006, would be used to calculate the guidelines in this case. Pursuant to §2T1.1, Application Note 1, the tax loss in evasion of payment cases includes interest and penalties (effective November 1, 2001); therefore, the tax loss in this case would increase from $1,377,597 to $3,600,821.53. As a result, the total offense level would be 26. Combined with a criminal history category I, the advisory guideline imprisonment range would be 63 to 78 months.

At sentencing, the Government renewed its objection to the PSR's legal conclusion that an evasion of payment under §7201 is not a continuing offense. The district court overruled the Government's objection and adopted the findings and recommendations in the PSR, including the advisory guidelines range calculation of 37 to 46 months' imprisonment. After considering both parties' sentencing arguments and the sentencing factors enumerated in 18 U.S.C. §3553(a), the court sentenced Barker within its calculated advisory guidelines range to 42 months' imprisonment.



II. DISCUSSION



A. Sufficiency of the Evidence

Barker appeals his conviction, arguing that the Government's evidence of his willfulness was insufficient to sustain his conviction for tax evasion.
[We] review the sufficiency of the evidence de novo, viewing evidence in the light most favorable to the government, resolving conflicts in the government's favor, and accepting all reasonable inferences that support the verdict. This standard of review is strict; we will uphold the verdict if there is any interpretation of the evidence that could lead a reasonableminded jury to find the defendant guilty beyond a reasonable doubt.

United States v. Cole, 525 F.3d 656, 661 (8th Cir.) (quoting United States v. Hamilton, 332 F.3d 1144, 1148-49 (8th Cir. 2003)) (internal quotation marks omitted), cert. denied, Gilbert v. United States, 555 U.S. ---, 129 S.Ct. 309 (2008).

A conviction for "willfully attempting to evade or defeat the payment of a tax" under 26 U.S.C. §7201 requires proof of three elements: "willfulness; the existence of a tax deficiency; and an affirmative act constituting an evasion or attempted evasion of the tax." United States v. Schoppert, 362 F.3d 451, 454 (8th Cir. 2004) (quoting Sansone v. United States [ 65-1 USTC ¶9307], 380 U.S. 343, 351 (1965)). The willfulness element "requires the Government to prove that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty." Cheek v. United States [ 91-1 USTC ¶50,012], 498 U.S. 192, 201 (1991). However, where a defendant seeks to defeat a finding of willfulness through a "good-faith belief that he was not violating any of the provisions of the tax laws ...[,] the issue is whether, based on all the evidence, the Government has proved that the defendant was aware of the duty at issue." Id. at 201-02; see also United States v. Gustafson [ 2008-1 USTC ¶50,393], 528 F.3d 587, 591 n.3 (8th Cir. 2008) (holding that a "good-faith misunderstanding of the law or a good-faith belief that [they were] not violating the law" negates willfulness (alteration in original) (quoting Cheek [ 91-1 USTC ¶50,012], 498 U.S. at 201)).

Barker argues that the Government's evidence of his willfulness was insufficient to sustain his conviction because it did not refute his good-faith beliefs that the payment of federal income taxes was voluntary under the tax code, that he was a nonresident alien not subject to federal income tax, and that he discharged any tax liability through his chargeback redemption strategy. We disagree. Because Barker's argument merely raises the issue of whether he "knew of the duty purportedly imposed by the provision of the statute or regulation he is accused of violating," we need only determine whether "the Government has proved that the defendant was aware of the duty at issue." Cheek [ 91-1 USTC ¶50,012], 498 U.S. at 201-02. Viewing all of the evidence in the light most favorable to the jury's verdict and drawing all reasonable inferences in the Government's favor, we find that the evidence was sufficient for a reasonable jury to conclude beyond a reasonable doubt that Barker was aware of his obligation to pay federal income taxes and that Barker, therefore, acted willfully.

At trial, the Government presented significant circumstantial evidence showing that Barker was aware of his obligation to pay federal income taxes. The Government produced evidence that Barker maintained his personal assets in domestic and offshore entities from 1996 until at least December 2006. Given the temporal proximity between the IRS's assessment of his taxes in August 1997 and December 1999, the IRS's November 1997 tax lien and March 2000 threat to levy his assets, and Barker's attempts to shield his assets, a reasonable jury could conclude that Barker's attempt to place his assets beyond the reach of the IRS demonstrated Barker's knowledge of his duty to pay federal income taxes. See United States v. Brooks, 174 F.3d 950, 955 (8th Cir. 1999) (finding sufficient evidence of willfulness where the defendant "made a concerted effort to dissociate himself from his property and income" by transferring property to a trust).

The Government also produced evidence that Barker sought to terminate his relationship with Laughlin, Privatech and Nevis American after he discovered that the IRS was investigating the companies for assisting others in evading payment of their taxes and was learning the identity of their clients. Given the close temporal proximity between the IRS's attempts to levy Barker's assets and Barker's April 2003 statements that "I don't need the IRS connecting me to Shasta," "I didn't pay major dollars for that to happen," and "they assured me that a connection could never be made," a reasonable jury could conclude that Barker's letter demonstrated his awareness of his duty to pay taxes and his efforts to avoid payment. Cf. United States v. Noske [ 97-2 USTC ¶50,538], 117 F.3d 1053, 1059 (8th Cir. 1997) (finding sufficient evidence of a defendant's willfulness in a conspiracy to evade taxes where she sought to liquidate her client's assets after an adverse tax court determination).

The Government also elicited testimony that Barker falsely denied having any knowledge of or involvement with Shasta Property Management, Inc. during the course of the IRS's investigation of Laughlin, Privatech and Nevis American. Barker's false statement to the IRS would also allow a reasonable jury to conclude that Barker was aware of his duty to pay taxes and attempted to avoid that duty. See Brooks, 174 F.3d at 955 (holding that a defendant's submission of false information to the IRS supported a finding that the defendant willfully evaded taxes).

Although the jury could have accepted Barker's testimony regarding his goodfaith beliefs, "in reviewing the denial of a judgment of acquittal, it is not our role to assess [the defendant's] credibility." United States v. Garcia-Hernandez, 530 F.3d 657, 662 (8th Cir. 2008). Because a reasonable interpretation of the Government's evidence "could lead a reasonable-minded jury to find the defendant guilty beyond a reasonable doubt," we must affirm Barker's conviction. See Cole, 525 F.3d at 661 (quoting Hamilton, 332 F.3d at 1149).



B. Procedural Error in Sentencing

The Government cross-appeals Barker's sentence, arguing that the district court erred in its conclusion that an evasion of payment under §7201 is not a continuing offense for the purpose of determining the correct guidelines version under U.S.S.G. §1B1.11. Because this error led the court to use the wrong guidelines version in calculating Barker's advisory sentencing guideline range, the Government argues that the district court committed a procedural error requiring us to vacate Barker's sentence and remand for resentencing. "We review a sentence in two parts: first, we review for significant procedural error, such as an improper calculation of the advisory sentencing guidelines range; and second, absent significant procedural error, we review for substantive reasonableness." United States v. Fischer, 551 F.3d 751, 754 (8th Cir. 2008). In reviewing a sentence for procedural error, we review the district court's factual findings for clear error and its application of the guidelines de novo. See United States v. Yah, 500 F.3d 698, 702 (8th Cir. 2007).

We agree with the Government that the district court erred in its legal conclusion that an evasion of payment under §7201 is not a continuing offense. See United States v. Marchant [ 85-2 USTC ¶9724], 774 F.2d 888, 891 (8th Cir. 1985) ("the violation of section 7201 is a 'continuing offense'"). Because tax evasion is a continuing offense, the date of the defendant's last act of evasion is the "date of the offense of conviction" in determining the appropriate version of the guidelines under U.S.S.G. §1B1.11. See United States v. Maggard, 156 F.3d 843, 849 (8th Cir. 1998) ("Some offenses ... are 'continuing offenses' for which the completion date controls which version of the Sentencing Guidelines should apply." (quoting United States v. Reetz, 18 F.3d 595, 598 (8th Cir. 1994))); U.S.S.G. §1B1.11 cmt. 2 ("Under subsection (b)(1), the last date of the offense of conviction is the controlling date for ex post facto purposes." (underline omitted)).

The district court's error constitutes significant procedural error because it led the court to use the wrong version of the guidelines manual, thereby resulting in a lower advisory sentencing guidelines range. Based on its erroneous legal conclusion that tax evasion was not a continuing offense, the court used April 15, 1998, the day that Barker's 1997 tax return was due, rather than December 2006, the date of Barker's last acts of evading payment, as the "date of the offense of conviction" under §1B1.11. This led the court to use the November 1997 U.S.S.G. manual under §1B1.11(b)(1) and resulted in an advisory guidelines range of 37 to 46 months' imprisonment. If, however, the court had used the December 2006 date, which was well supported by the evidence at trial and the PSR's offense conduct paragraphs adopted by the district court, then the court would have used the November 2007 U.S.S.G. manual, the version of the guidelines manual in effect as of the date of sentencing. 1 See U.S.S.G. §1B1.11(a). Under the November 2007 U.S.S.G. manual, which included the November 2001 amendments to U.S.S.G. §§2T1.1 and 2T4.1, Barker's advisory sentencing guidelines range would have been 63 to 78 months' imprisonment. 2 Because the district court's error resulted in an improperly calculated advisory guidelines range, we find that the court committed a significant procedural error. See Fischer, 551 F.3d at 754.

Furthermore, we find no merit in Barker's contention that the court's procedural error is harmless based on Barker's assertion that the district court would have imposed the same sentence even if the November 2007 version of the guidelines had been applied. Barker has failed to identify any evidence to support his claim that the court would have given the same sentence had it correctly calculated the advisory guidelines range, and we have independently determined that none of the court's statements at sentencing could be reasonably construed to support Barker's position. Thus, we do not find the district court's procedural error to be harmless. See United States v. Gutierrez, 437 F.3d 733, 736 (8th Cir. 2006) ("The party benefitting from the error has the burden to prove that it was harmless.").

Because the district court committed a significant procedural error, we do not review the sentence for substantive reasonableness, but we instead remand for resentencing. See United States v. Vickers, 528 F.3d 1116, 1120 (8th Cir. 2008). 3



III. CONCLUSION

For the foregoing reasons, we affirm Barker's conviction, vacate the sentence and remand to the district court for resentencing.

1 The Probation Office referred to the November 2006 U.S.S.G. manual in the PSR because it anticipated that sentencing would occur prior to November 1, 2007, the effective date of the November 2007 U.S.S.G. manual. Because sentencing occurred on December 20, 2007, however, we recognize that the November 2007 U.S.S.G. manual was the version of the guidelines "in effect as of the date of sentencing." See U.S.S.G. §1B1.11(a).

2 This calculation is based upon the amended tax table in §2T4.1 and the PSR's finding that the tax loss, with penalties and interest included, is $3,600,821.

3 We note that Barker submitted three pro se filings on November 6, 2008, November 10, 2008, and December 4, 2008, after this case had been fully briefed. We do not consider these pro se filings because "[w]e generally do not accept pro se motions or briefs when an appellant is represented by counsel." United States v. McIntosh, 492 F.3d 956, 961 n.2 (8th Cir. 2007); see also United States v. Moore, 481 F.3d 1113, 1114 n.2 (8th Cir.), cert. denied, 552 U.S. ---, 128 S. Ct. 122 (2007).

Willful evasion of tax. --Willful Failure to File Return, Supply Information, or Pay Tax: Willful evasion of tax

Before a defendant can be found guilty of a felony for willful attempt to evade or defeat the income tax there must be proof other than that necessary to make out the misdemeanors for failure to file returns, submit information, or pay tax. Use of the word "attempt" in the Code indicates the need for some willful commission in addition to the willful omissions that make up the misdemeanors.

Spies, 43-1 USTC ¶9243, 317 US 492.

J.H. Jones, CA-5, 47-2 USTC ¶9402, 164 F2d 398.

G.L. Smith, CA-3, 53-2 USTC ¶9538, 206 F2d 905.

E.J. Mesheski, CA-7, 61-1 USTC ¶9233, 286 F2d 345.

A. Burrell, CA-5, 75-1 USTC ¶9152, F2d 904.

Conviction and sentence for willfully attempting to evade tax were affirmed.

Orzechowski, CA-3, 1930 CCH ¶9100, 37 F2d 713.

R. Capone, CA-7, 2 USTC ¶786, 51 F2d 609. Cert. denied, 284 US 669.

G.G. Oliver, CA-7, 1931 CCH ¶9649, 54 F2d 48. Cert. denied, 285 US 543.

Pappas, CA-10, 54-2 USTC ¶9637, 216 F2d 515.

Clayton-Kennedy, DC, 1933 CCH ¶7079, 2 FSupp 233.

J.J. Sullivan, CA-2, 38-2 USTC ¶9429, 98 F2d 79.

J.J. McCormick, CA-2, 3 USTC ¶1187, 67 F2d 867. Cert. denied, 291 US 662.

D.D. Battjes, CA-6, 49-1 USTC ¶9149, 172 F2d 1.

J.F. Keenan, CA-7, 59-1 USTC ¶9349, 267 F2d 118.

R.G. Carlisle, CA-6, 59-1 USTC ¶9462, 266 F2d 551.

S. Lefkowitz, DC, 59-1 USTC ¶9449, 173 FSupp 932.

Yarborough, CA-4, 56-1 USTC ¶9295, 230 F2d 56. Cert. denied, 351 US 969.

A.C. Willingham, CA-5, 61-1 USTC ¶9401, 289 F2d 283. Cert. denied, 368 US 828.

L.A.E. Mollet, CA-2, 61-1 USTC ¶9444, 290 F2d 273.

L.M. Bernard, CA-7, 61-1 USTC ¶9221, 287 F2d 715. Reh'g denied, on other grounds, CA-7, 61-1 USTC ¶9378.

H.L. Taylor, CA-4, 62-2 USTC ¶9590, 305 F2d 183. Cert. denied, 371 US 894.

G.E. Baldwin, CA-7, 62-2 USTC ¶9644, 307 F2d 577. Cert. denied, 371 US 947.

N. Madden, CA-4, 62-1 USTC ¶9378, 300 F2d 757.

F.W. Malone, CA-5, 62-2 USTC ¶9582, 304 F2d 878.

A.C. Cain, CA-7, 62-1 USTC ¶9226, 298 F2d 934. Cert. denied, 370 US 902.

I. Woodner, CA-2, 63-2 USTC ¶9515, 317 F2d 649. Cert. denied, 375 US 903.

M. Sherwin, CA-9, 63-2 USTC ¶9550, 320 F2d 137. Cert. denied, 375 US 964.

D.S. Fago, CA-2, 63-2 USTC ¶9576, 319 F2d 791. Cert. denied, 375 US 906.

A.M. Katz, CA-1, 63-2 USTC ¶9600, 321 F2d 7. Cert. denied, 375 US 903.

J.B. Cooper, CA-5, 63-2 USTC ¶9651, 321 F2d 274. Cert. denied, 375 US 964.

B. Mortimer, CA-7, 65-1 USTC ¶9301, 343 F2d 500. Cert. denied, 382 US 842.

J. Grandinetti, CA-3, 64-2 USTC ¶9822, 337 F2d 1010.

E.O.D. Campbell, CA-2, 65-2 USTC ¶9664, 351 F2d 336. Cert. denied, 383 US 907.

H.C. Trownsell, CA-7, 66-2 USTC ¶9661.

H. Roy, CA-9, 67-1 USTC ¶9355, 377 F2d 544. Cert. denied, 389 US 936.

C.E. Mansfield, CA-7, 67-2 USTC ¶9586, 381 F2d 961. Cert. denied, 389 US 1015.

W.P. Johnson, Jr., CA-3, 67-2 USTC ¶9750, 386 F2d 630.

J.D. McCarty, CA-10, 69-1 USTC ¶9322, 409 F2d 793. Cert. denied, 396 US 836.

E.E. Haseltine, CA-9, 70-1 USTC ¶9140, 419 F2d 579.

H.G. Browney, CA-4, 70-1 USTC ¶9154, 421 F2d 48.

W.B. Aberson, CA-2, 70-1 USTC ¶9167, 419 F2d 820. Cert. denied, 397 US 1066.

E.E. Matosky, CA-7, 70-1 USTC ¶9210, 421 F2d 410. Cert. denied, 398 US 904.

S.J. Spinelli, CA-9, 71-1 USTC ¶9434, 443 F2d 2.

A.L. Dowell, CA-10, 71-2 USTC ¶9642, 446 F2d 145. Cert. denied, 404 US 984.

A.M. Siragusa, CA-2, 71-2 USTC ¶9730, 450 F2d 592. Cert. denied, 405 US 974.

L.L. Bursten, CA-5, 72-1 USTC ¶9152, 453 F2d 605. Cert. denied, 409 US 843.

L. Potts, CA-7, 72-1 USTC ¶9371, 459 F2d 412.

A.M. Newman, CA-5, 72-2 USTC ¶9719, 468 F2d 791. Cert. denied, 411 US 905.

K. Vanderburgh, CA-9, 73-1 USTC ¶9304, 473 F2d 1313.

G. Stribling, CA-6, 73-2 USTC ¶9604.

G.O. Meriwether, CA-5, 73-2 USTC ¶9731, 486 F2d 498.

D.M. Sarvis, CA-9, 73-2 USTC ¶9787, 488 F2d 526.

L. Kalmanson, CA-5, 74-1 USTC ¶9128.

J.B. Pinner, CA-4, 74-2 USTC ¶9547, 498 F2d 1398.

J.E. Smith, CA-4, 74-2 USTC ¶9709, 502 F2d 1150.

W.A. Lisowski, CA-7, 74-2 USTC ¶9784, 504 F2d 1268.

E. Cook, CA-5, 75-1 USTC ¶9134. Aff'd, per curiam, CA-5, 77-1 USTC ¶9165, 546 F2d 82.

E.J. Barrett, CA-7, 75-1 USTC ¶9340, 505 F2d 1091.

G.B. Parr, CA-5, 75-1 USTC ¶9349, 509 F2d 1381.

N.D. Anderson, CA-4, 75-1 USTC ¶9368.

D.C. Ross, CA-5, 75-1 USTC ¶9428, 511 F2d 757. Cert. denied, 423 US 836.

N.L. Ordoneaux, CA-5, 75-2 USTC ¶9516.

M. Stern, CA-9, 75-2 USTC ¶9637, 519 F2d 521.

J.G. Martin, CA-2, 75-2 USTC ¶9699, 525 F2d 703. Cert. denied, 423 US 1035.

J.L Allen, CA-6, 75-2 USTC ¶9685, 522 F2d 1229. Cert. denied, 423 US 1072.

J.H. Fendley, CA-5, 76-1 USTC ¶9110.

C.E. Prevatt, CA-5, 76-1 USTC ¶9180, 526 F2d 400.

V. Bernabei, CA-6, 76-2 USTC ¶9648.

J.W. Venditti, CA-5, 76-2 USTC ¶9492, 533 F2d 217.

B. Daniels, CA-5, 80-1 USTC ¶9438, 617 F2d 146.

W.L. Davis, CA-6, 81-1 USTC ¶9346.

S. Dwoskin, CA-5, 81-1 USTC ¶9416, 644 F2d 418.

R. Hebel, CA-8, 82-1 USTC ¶9162, 668 F2d 995. Cert. denied, 102 SCt 2014.

L.F. Shelton, CA-7, 82-1 USTC ¶9166, 669 F2d 446.

R.C. Thetford, CA-5, 82-1 USTC ¶9393, 676 F2d 170.

H. Stone, CA-9, 85-2 USTC ¶9652, 770 F2d 842.

D.K. Turner, CA-10, 86-2 USTC ¶9647, 799 F2d 627.

R.A. Copeland, CA-7, 86-1 USTC ¶9314, 786 F2d 768.

W. Jeffries, CA-7, 88-2 USTC ¶9459, 854 F2d 254.

M.C. Frederickson, CA-8, 88-2 USTC ¶9405.

F.C. Parrino, CA-8, 88-1 USTC ¶9348.

D.G. Auen, CA-2, 89-1 USTC ¶9105.

M.W. Williams, CA-11, 89-2 USTC ¶9390, 875 F2d 846.

H. Michaud, CA-1, 88-2 USTC ¶9577, 860 F2d 495.

J.J. Hogan, CA-1, 88-2 USTC ¶9593, 861 F2d 312.

W.A. Connor, Jr., CA-3, 90-1 USTC ¶50,166, 898 F2d 942.

W. Willie, CA-10, 91-2 USTC ¶50,409.

J.J. DiPetto, CA-2, 91-2 USTC ¶50,407, 936 F2d 96. Cert denied, 10/7/91.

R.W. Daniel, CA-6, 92-1 USTC ¶50,095.

E.A. Boone, CA-9, 92-1 USTC ¶50,179.

L. Chesson, Jr., CA-5, 92-1 USTC ¶50,230.

P.B. Bonneau, CA-1, 92-2 USTC ¶50,385, 970 F2d 929.

F.O. Becker, CA-7, 92-2 USTC ¶50,314, 965 F2d 383.

R.L. McGill, CA-1, 92-1 USTC ¶50,052.

W. Rea, CA-2, 92-1 USTC ¶50,191, 958 F2d 1206.

J.A. Brimberry, CA-7, 92-1 USTC ¶50,288, 961 F2d 1286.

R.L. Huguenin, CA-1, 91-2 USTC ¶50,571, 950 F2d 23.

R.W. Charroux, CA-5, 93-2 USTC ¶50,628, 3 F3d 827.

J.L. Martin, CA-4 (unpublished opinion), 97-2 USTC ¶50,727, aff'g, per curiam, an unreported District Court decision.

S.J. Holland, CA-7, 98-2 USTC ¶50,898, 160 F3d 377.

J.E. Codner, CA-10 (unpublished opinion), 2000-1 USTC ¶50,389, aff'g an unreported District Court decision.

L. Tekle, CA-9 (unpublished opinion), 2002-1 USTC ¶50,225, aff'g an unreported District Court decision.

T.P. Brennan, CA-3 (unpublished opinion), 2002-1 USTC ¶50,455, aff'g an unreported District Court decision.

M. Wick, CA-9 (unpublished opinion), 2002-1 USTC ¶50,456, aff'g an unreported District Court decision.

Willfulness may be negated by a good-faith misunderstanding of the law or a good-faith belief that there is no violation regardless of whether the claim is objectively unreasonable.

J.L. Cheek, SCt, 91-1 USTC ¶50,012, 11 SCt 604.

The Seventh Circuit, on remand, reversed and remanded the unreported DC Ill. decision.

J.L. Cheek, CA-7, 91-1 USTC ¶50,232, 931 F2d 1206.

A pilot's contention that the trial court erred in not instructing the jury on the advice of counsel defense was not valid because the court's instructions treated the issues fairly and accurately. Moreover, the court's instructions as to willfulness encompassed any defense claiming a good faith belief of lawful conduct. Thus, the taxpayer's conviction and sentencing for tax evasion and failure to file returns on retrial were upheld, consistent with the U.S. Supreme Court's opinion in J.L. Cheek, SCt, 91-1 USTC ¶50,012.

J.L. Cheek, CA-7, 93-2 USTC ¶50,473, 3 F3d 1057. Cert. denied, 2/22/94.

Similarly.

R.G. Powell, CA-9, 91-2 USTC ¶50,320, 936 F2d 736. Amended, CA-9, 92-1 USTC ¶50,128, 955 F2d 1206.

Evidence was sufficient to find the taxpayer guilty of attempted evasion of income taxes.

M.C. Goldberg, DC, 62-2 USTC ¶9638, 206 FSupp 394. Aff'd on another issue, CA-3, 64-1 USTC ¶9316, 330 F2d 30.

W.A. Mousley, CA-3, 63-1 USTC ¶9245, 311 F2d 795. Cert. denied, 372 US 966.

P.J. Richard, DC, 63-1 USTC ¶9243. Aff'd on other grounds, CA-1, 63-1 USTC ¶9376, 315 F2d 331.

M.R. Scheetz, DC, 64-1 USTC ¶9364, 224 FSupp 789.

V.M. Gase, DC, 66-1 USTC ¶9288, 248 FSupp 704.

M.L. Donovan, DC, 66-1 USTC ¶9231, 250 FSupp 463.

G.L. Mancuso, CA-4, 67-2 USTC ¶9487, 378 F2d 612. Petition for rehearing denied, CA-4, 68-1 USTC ¶9166, 387 F2d 376. Cert. denied, 390 US 955.

D.E. Bartone, CA-6, 68-2 USTC ¶9564, 400 F2d 459.

A.T. Critzer, CA-4, 74-2 USTC ¶9505, 498 F2d 1160.

R.E. Berzinski, CA-8, 76-1 USTC ¶9211, 529 F2d 590.

B. Kaatz, CA-10, 83-1 USTC ¶9156, 705 F2d 1237.

W. Greene, CA-9, 83-1 USTC ¶9175, 698 F2d 1364.

F.J. Hecht, CA-8, 83-1 USTC ¶9233, 705 F2d 976.

J.A. Shorter, Jr., CA-D.C., 87-1 USTC ¶9127, 809 F2d 54.

R.S. Hart, DC Ind., 88-2 USTC ¶9467.

G.M. House, DC Mich., 87-2 USTC ¶9561.

D.E. Dack, CA-7, 93-1 USTC ¶50,162, 987 F2d 1282.

H.J. Sallee, CA-5, 93-1 USTC ¶50,236, 984 F2d 643.

W.J. Benson, CA-7, 95-2 USTC ¶50,540, 67 F3d 641.

J. Klausner, CA-2, 96-1 USTC ¶50,173.

R.A. Valenti, CA-7, 97-2 USTC ¶50,629, 121 F3d 327.

See also ¶41,318.177.

Taxpayer was found not guilty of fraud with intent to evade tax.

F. Palermo, CA-3, 58-2 USTC ¶9850, 259 F2d 872.

A.T. Critzer, CA-4, 74-2 USTC ¶9505, 498 F2d 1160.

L. Harris, CA-7, 91-2 USTC ¶50,433, 942 F2d 1125.

B. Romano, CA-2, 91-2 USTC ¶50,471, 938 F2d 1569.

J.R. Montgomery, DC, 54-1 USTC ¶9247.

M.J. Marler, DC, 56-1 USTC ¶9483.

C. Jannuzzio, DC, 60-2 USTC ¶9512, 184 FSupp 460.

J.C. Tyler, DC, 61-1 USTC ¶9290.

R.E. Ford, Sr., DC, 62-1 USTC ¶9417.

W.B. Archer, DC, 63-2 USTC ¶9632.

J.B. Nicosia, DC, 73-2 USTC ¶9587, 360 FSupp 814.

K. Frosch, BC-DC Pa., 2002-1 USTC ¶50,124.

A judgment by the Court of Appeals for the Fifth Circuit affirming the taxpayer's conviction by a jury for willfully attempting to evade taxes was vacated and remanded on certiorari by the U.S. Supreme Court, which followed the Solicitor General's recommendation that certiorari be granted because the government failed to disclose written or recorded statements or reports of its witnesses in its possession.

N.C. Beasley, SCt, 76-2 USTC ¶9555, 425 US 956, vacating and remanding CA-5, 75-2 USTC ¶9725, 519 F2d 233.

Pursuant to the Supreme Court decision above, the Court of Appeals for the Fifth Circuit remanded the case to the District Court with instructions to consider the issues raised by the Solicitor General's investigation.

N.C. Beasley, CA-5, 76-2 USTC ¶9556, 535 F2d 293, on remand from SCt, 76-2 USTC ¶9555, 425 US 956.

On appeal, after the remand, it was held that the government's failure, albeit in good faith, to produce pre-trial statements given by a key prosecution witness violated the Jencks Act. The viola tion, however, constituted reversible error as to only one of the two charges.

N.C. Beasley, CA-5, 78-2 USTC ¶9586, 576 F2d 626. Defendant's petition for rehearing denied, CA-5, 79-1 USTC ¶9107.

Insufficient evidence was presented to support married taxpayers' convictions for tax evasion where the government failed to prove the required existence of a tax deficiency. Under the "no earnings and profits, no income" rule established in P.F. DiZenzo, CA-2, 65-2 USTC ¶9518, amounts that the couple diverted from their wholly owned corporation could not be taxable to them personally as a constructive dividend, where the company had no earnings or profits. Instead, the diverted funds constituted a nontaxable reduction of the couple's shareholder loan account.

J. D'Agostino, CA-2, 98-1 USTC ¶50,380, 145 F3d 69.

The conviction of a lawyer for tax evasion where the amounts of depreciation on some 90 pieces of taxpayer's property, which were large and important items in the net worth method used to determine his income, were based upon speculative and uncertain values and economic lives was reversed.

R.G. Lenske, CA-9, 67-2 USTC ¶9631, 383 F2d 20.

On evidence that the taxpayer had failed to file returns for the years in issue because he was "unable to pay" but that he submitted or caused others to submit W-2 forms disclosing his tax responsibility to the Government, the Court found an absence of an "evil motive", such as is required for conviction. Accordingly, the motion for judgment of acquittal was granted.

R.R. Power, DC, 68-2 USTC ¶9443.

Where the evidence indicated that the taxpayer's purpose in failing to pay over collected taxes for his clients was to take advantage of the time lag in the government's investigation of delinquent returns to tide him over during a period of personal financial hardship, he was not guilty of willfully attempting to evade the payment of taxes of his clients. District Court reversed.

C.L.O. Edwards, CA-9, 67-1 USTC ¶9356.



A dentist who opened two bank accounts using false personal information in an attempt to prevent the IRS from collecting taxes owed was properly convicted of tax evasion and failure to pay tax. The taxpayer transferred large amounts of income earned from his dental practice to bank accounts upon receiving deficiency notices for the tax years in issue. His use of a false social security number (SSN), birth place and birth date could have easily misled or concealed information from the IRS.

R.S. Carlson, CA-9, 2001-1 USTC ¶50,152.

Conviction for willfully attempting to evade taxes by filing false returns was reversed on two counts because there was insufficient evidence to determine that a bank installment loan department head had received money illegally from a bank client.

G.O. Meriwether, CA-5, 73-2 USTC ¶9731, 486 F2d 498.

The Court of Appeals for the Third Circuit, regarding the lower court's conclusion that there was willful evasion of taxes for 1966, reversed with respect to the taxpayer-husband and reversed and remanded with respect to his wife. There should have been a reasonable doubt as to whether the husband had thwarted the investigation by the IRS by taking steps to conceal their 1965 tax records. Since there was a question for the jury regarding the wife's willfulness, she was granted a new trial because the jury was exposed to considerable evidence bearing on willful conduct in prior years for which the government failed to prove any deficiency.

E.F. House, CA-3, 75-2 USTC ¶9782, 524 F2d 1035, rev'g in part and rem'g in part DC, 75-1 USTC ¶9285. Reh'g denied by CA-3, 76-2 USTC ¶9616.

Willfulness need only exist when the returns are filed. The subsequent payment of enough to satisfy liability cannot be used to show the lack of willfulness.

C.F. Quinn, DC, 77-2 USTC ¶9503.

Willfulness was shown by consistent failure to report large amounts of income, failure to comply with summonses and the making of a false statement to an IRS agent.

C.A. Schafer, CA-5, 78-2 USTC ¶9717, 580 F2d 774.

The evidence showed that tax evasion was willful. The defendant had admitted to the IRS that he knew the tax laws well, that he knew that illegally obtained income was reportable and that he had considered reporting it but feared that if he did his employer would discover his activities.

L. Ojala, CA-8, 78-2 USTC ¶9845, 587 F2d 395.

The jury properly concluded, based on all the psychiatric testimony, that the defendant was not mentally ill during the years in question. No error was involved in allowing the government's doctors to testify as to his competency to commit the offense even though they were initially appointed to determine his competency to stand trial.

B. Klein, CA-10, 80-1 USTC ¶9109.

Evidence of a consistent pattern of not reporting large amounts of income is in itself evidence of wilfulness.

S.R. King, CA-8, 80-1 USTC ¶9251, 616 F2d 1034.

Operators of a legal house of ill repute were properly convicted of tax evasion for failing to withhold tax as to wages paid to auxiliary employees such as maids and bartenders. The amounts received by those persons were wages, not tips. The overall operation established an intent to deprive the government of taxes.

J. Conforte, CA-9, 80-1 USTC ¶9417, 624 F2d 869. Cert. denied, 449 US 1012, 101 SCt 568.

Before the Spies case it was held that willful failure to file a return was in itself evidence of an attempt to evade and defeat the income tax laws.

L.C. O'Brien, CA-7, 1931 CCH ¶9474, 51 F2d 193. Cert. denied, 284 US 673.

Miro, CA-2, 1932 CCH ¶9396, 60 F2d 58.

The filing of a false W-4 form by an insurance agent was found to be the affirmative act necessary to support a felony charge of willful evasion of tax.

J.R. Williams, CA-5, 91-1 USTC ¶50,197, 928 F2d 145. Cert. denied, 10/7/91.

An individual's conviction for attempting to evade assessment of income taxes was upheld because the filing and maintaining on file of Forms W-4, on which he falsely claimed exemption from withholding, constituted the necessary affirmative act of evasion. A reasonable jury could have concluded that the taxpayer filed the forms with the intent of permanently eliminating income tax withholding. The government fulfilled its obligation of showing that the individual willfully attempted to evade assessment, and whether or not he was successful was irrelevant.

R.A. King, CA-7, 97-2 USTC ¶50,746, 126 F3d 987.

A subcontractor who received earned income for services rendered but who directed that his paychecks be made payable to a tax avoidance organization was properly convicted of tax evasion and failure to file income tax returns. Testimony and documentary evidence established that the subcontractor received earned income and filed no returns; thus, the existence of a tax deficiency was proven. Moreover, the taxpayer's admissions to a co-worker, as well as instructions to make checks payable to the tax protest organization, were indicative of his willful evasion of taxes.

L. Beall, CA-7, 92-2 USTC ¶50,417, 970 F2d 343.

The indictment leading to a steam fitter's conviction for tax evasion, which charged conduct constituting both evasion of assessment of tax and evasion of payment of tax, was not duplicitous. The individual's filing of a fraudulent Form W-4 was a sufficient affirmative act to support a felony tax evasion prosecution.

R.S. Mal, CA-9, 91-2 USTC ¶50,518, 942 F2d 682.

An individual's motion for judgment of acquittal notwithstanding jury verdicts that he was guilty of the crimes of tax evasion and the willful failure to file returns was denied. Evidence of fraudulently filed withholding forms established the affirmative act element of the crime of tax evasion. Willfulness was established for both crimes through evidence of an incorrect address and false information provided during the IRS investigation.

J.R. Crocker, DC Del., 92-1 USTC ¶50,008, 753 FSupp 1209.

The IRS did not have to prove that the form filed by a massage parlor operator was a "return" in order to establish tax evasion because the filing of a return is not an element of the crime of tax evasion. Similarly, in proving that the taxpayer filed a false return, the IRS was not required to establish that it was a joint return, as described in the indictment.

S.N. Robinson, CA-5, 92-2 USTC ¶50,565, 974 F2d 575.

A taxpayer who provided false social security numbers to his bank and brokerage firms, which in turn caused these payors to issue Forms 1099 to the IRS under the false social security numbers, was properly convicted on four counts of tax evasion.

J.C. Payne, CA-10, 92-2 USTC ¶50,555, 978 F2d 1177. Cert. denied, 113 SCt 2995.

The IRS failed to prove that a husband and wife willfully attempted to evade or defeat payment of their taxes. There was no fraud on the part of the wife in signing returns and filing for bankruptcy shortly after the taxes were eligible for discharge in bankruptcy. Although the husband claimed excessive exemptions and filed late returns after being contacted by the IRS, the IRS's assertion that he willfully attempted to avoid paying taxes by making minimal payments on the overdue amounts was not supported by the evidence. The sparse stipulated facts that the IRS relied upon did not establish that the husband knew he had a duty to pay the taxes and that he voluntarily and intentionally violated that duty.

R.A. Peterson, BC-DC Wyo., 93-2 USTC ¶50,499, 160 BR 385.

An individual who prepared sham promissory notes for tax protestors, listed the debt on their bankruptcy petition forms and filed the petitions in order to cause the IRS to release tax levies on their wages was properly convicted of aiding and abetting attempted income tax evasion. Although the bankruptcy filings alone did not constitute an unlawful attempt to evade payment of tax, the false assertions of heavy debt and financial distress, which had the purpose of depriving the government of amounts collectible under the levies, supported the conviction. Similarly, convictions for conspiracy to defraud the United States were sustained because the false assertions provided the required element of dishonesty.

R. Huebner, CA-9, 95-1 USTC ¶50,008, 48 F3d 376. Cert. denied, 116 SCt 71.

An attorney who served as administrator of an estate was properly convicted of tax evasion. The attorney's transfers of estate funds among accounts at the same bank were not only part of an embezzlement scheme, but also constituted affirmative acts showing an intent to conceal receipt of embezzled funds. Also, the attorney sought an extension of time to file his tax return and underpaid estimated taxes in order to mislead the government as to his true amount of income.

W.E. Eaken, CA-7, 94-1 USTC ¶50,098, 17 F3d 203.

A married couple and their tax attorney were properly convicted of tax evasion despite their claim that the husband's underlying tax deficiency had been eliminated. His voluntary payments and the proceeds from the sale of his seized property did not eliminate his original tax liability and the IRS was not required to apply the seized amounts in the same manner as he requested for his voluntary payments. The IRS applied the seizure proceeds to his total tax, interest and penalties for the earliest year owed; thus, there continued to be a deficiency even thought the husband's total payments exceeded the amount of tax that he originally owed.

F.Y. Wright, Jr., CA-5, 2000-1 USTC ¶50,438, 211 F3d 233. Aff'g in part and rem'g in part an unreported District Court decision.

A bankruptcy court's determination that the government failed to meet its burden of proving that an individual willfully evaded taxes was erroneous. Prior to the debtor's bankruptcy filing, a federal district court allowed the government's federal tax lien to take priority over the mortgage and that may have implicated a finding of fraud. In addition, the bankruptcy court erred in its finding that the debtor did not have the ability to pay his tax liabilities in light of his substantial income tax liability three years after he allegedly ceased to earn an income. Accordingly, the bankruptcy court was instructed to make a factual determination as to whether evidence of a willful attempt to evade taxes existed under a totality of the circumstances.

S.M. Spiwak, DC Fla., 2002-2 USTC ¶50,568, 285 BR 744.

The IRS reached an agreement with Doctors Benefit Insurance Company (DBIC), assignee of xélan Insurance Company Limited, with respect to group supplemental insurance programs offered to members of xélan. DBIC agreed to stop operations and return $500 million to the programs' participants. DBIC is required to withhold money on these payments, as well as make a $2.34 million payment to the IRS to resolve issues arising in connection with these policies.

IRS News Release IR-2005-114, October 3, 2005.

A dentist who was a persistent "tax protestor" willfully attempted to evade the federal income tax in violation of Code Sec. 7201. The government's evidence established that the dentist earned taxable income, owed substantial income tax, knew that he was required to file an income tax return, failed to pay any income taxes and willfully attempted to evade the taxes he owed. Thus, the evidence was sufficient to establish the offense of willful tax evasion.

R.E. Nolen, CA-5, 2007-1 USTC ¶50,285.

The evidence was sufficient to support a married couple's conviction for willfully attempting to evade or defeat tax. The husband, a certified public accountant, failed to report his accounting income from the nonprofit organization for which his wife was the executive director. He also did not report the rental income received from property that was leased to the organization on the couple's joint tax returns. The wife reported only half the rent she received for the property leased to the organization on her returns. Moreover, she used organization funds for her own purposes and tried to conceal such activities from the organization's auditors and the government by underreporting her income.

W.D. Madison, CA-6 (unpublished opinion), 2007-1 USTC ¶50,495, aff'g in part, rev'g and rem'g in part an unreported DC Tenn. decision.

An individual's conviction for willful tax evasion was not invalidated merely because he was seeking a Collection Due Process hearing to dispute his tax liability. His argument that the offense of tax evasion was not complete until the IRS was unable to collect taxes was without merit. The offense was complete when he failed to make tax payments and used three trusts to conceal his income. Further, the Paperwork Reduction Act did not preclude his conviction. There was no evidence that the control numbers on the tax forms were invalid.

D.R. Patridge, CA-7, 2007-2 USTC ¶50,806, 507 F3d 1092.

The sentence imposed on an individual for willfully attempting to evade payment of taxes was affirmed. After reaching a settlement agreement with the IRS, the individual submitted an offer in compromise in which he failed to disclose substantial assets to the IRS. The individual had transferred his income and assets to two companies he failed to disclose on Form 656, Offer in Compromise, and supporting documents. Although the individual argued that he was denied from presenting his good faith defense, he failed to identify specific evidence that was excluded by the court. The record established that he was allowed to introduce evidence, to argue the facts attacking the willfulness element, to testify extensively and to explain his doubts as to his tax liability. Further, since a formal assessment is not a required element to proving tax evasion, the court properly ruled that the government did not need to prove that a valid assessment had been issued.. Finally, the court was without authority to issue an order compelling the prosecution to grant immunity to the individual's witness who invoked Fifth Amendment privilege and refused to testify.

C.E. Vaughn, CA-4 (unpublished opinion), 2007-2 USTC ¶50,811, aff'g, per curiam, an unreported DC W.Va. decision.

A married couple was properly convicted of tax evasion. The documents and information seized pursuant to a search warrant was properly introduced into evidence to establish the couples' tax liability; thus, the couple's claim that the warrant lacked particularity was without merit. Further, the government's evidence presented at trial was sufficient for a rational jury to find that the wife willfully evaded paying the tax deficiency. The couple transferred money to an offshore account, kept assets in the name of trusts and used those assets to live a lavish lifestyle.

J. Van Meter, CA-5, 2008-1 USTC ¶50,373.

The director of a television station was properly convicted of tax evasion. A single count charging the individual with tax evasion covering several years was not duplicitous when the director exhibited the same pattern of evasive conduct for all the years in question leading to one continuous course of conduct. Moreover, the evidence used by the government to prove one count of tax evasion encompassing those years was the same evidence it would have used to prove evasion in each year individually.

T.L. Root, DC Pa., 2008-1 USTC ¶50,391.

A federal district court properly convicted and sentenced an individual for income tax evasion. The individual operated his business under a false name, concealed his identity and income, and did not file a tax return for any of the tax years at issue. A rational jury could easily infer that the individual knew of his obligation to file federal income tax returns and that his failure to do so was an intentional violation of a known legal duty.

N. Stierhoff, CA-1, 2009-1 USTC ¶50,103.

An individual was properly convicted of attempted tax evasion. There was no merit in his argument that the district court lacked jurisdiction due to an alleged defect in the arrest warrant that was issued after his indictment. Even if the warrant was defective, the illegal arrest or detention did not void a subsequent conviction.

A.L. Farnsworth, CA-3, 2009-1 USTC ¶50,104.

------------------------


Send comment to ab@irstaxattorney.com