Knowles v. United States

• Decision Date: 22 June 1955
• Docket Number: No. 5039.,5039.
• Citation: 224 F.2d 168
• Parties: Tad R. KNOWLES, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

224 F.2d 168 (1955)

Tad R. KNOWLES, Appellant, v. UNITED STATES of America, Appellee.

No. 5039.

United States Court of Appeals Tenth Circuit.

May 25, 1955.

Rehearing Denied June 22, 1955.

Everett E. Smith, Denver, Colo., for appellant.

Robert S. Wham, Denver, Colo. (Donald E. Kelley, Denver, Colo. and Robert D. Inman, Boulder, Colo., were with him on the brief), for appellee.

Before PHILLIPS, Chief Judge, and MURRAH and PICKETT, Circuit Judges.

MURRAH, Circuit Judge.

This is an appeal from a conviction and concurrent sentences on an indictment containing two counts, the first of which charged the appellant with having made and filed a materially false income tax return with the Collector of Internal Revenue for the District of Colorado, for the calendar year 1950 in violation of 26 U.S.C.A. § 3809(a). The second count charged the appellant with knowingly making or causing to be made a false and fraudulent statement and representation to agents of the Internal Revenue Service of the United States Treasury Department in violation of 18 U.S.C.A. § 1001.

The appellant did not choose to be a witness in his own behalf in the trial of the case, and in the first point on appeal he charges that the argument of counsel prejudicially called the jury's attention to his failure to take the witness stand.

The evidence showed, without dispute, that in the taxable year 1950, appellant received the sum of $3,570.00 from the sale of sheep which he did not report in his return for that year. On argument, counsel for appellant intimated to the jury that the appellant received the item as an agent for someone else, and was therefore not reportable as income. In the closing argument, counsel for the government answered the insinuation by saying that there was "not the slightest bit of explanation given to the Internal Revenue Department about it, or given to you. Now it was easy to explain to Mr. Coard Internal Revenue Agent; could be easy to explain to you, but it hasn't been done." The jury was asked to consider the matter from a standpoint of a statement having been filed with the government by the taxpayer both on a return and a net worth statement. And then counsel said, "He had every opportunity in the world given to make an explanation of it, to prove it was in error, to cast doubt upon it. And it wasn't done. Consider the sheep sale item, and opportunity given there, and no explanation given of that. And it was so easy to do if it were the truth."

It is concededly improper and reversible error to comment on the failure of a defendant to testify in his own behalf, and the test is whether the language used was manifestly intended or was of such character that the jury would naturally and necessarily take it to be a comment on the failure of the accused to testify. Morrison v. United States, 8 Cir., 6 F.2d 809. It is not improper for the government to draw attention to the failure or lack of evidence on a point if it is not intended to call attention to the failure of the defendant to testify. Thus, when counsel for the defendant moved for a mistrial or objected to the statement of counsel after the jury had been instructed, the court observed that it was perfectly proper to comment on the lack of evidence if he didn't comment on the failure of the defendant to give it, and that in his judgment counsel for the government did not refer to the failure of the defendant to testify. The jury was also told as a part of its instructions that anyone charged with a crime had a right to testify in his own behalf or not, and the mere fact that he failed to testify in his own behalf should not be counted against him or influence the jury in any manner. Appellant concedes the general rule, applicable in federal courts, that prompt and emphatic condemnation by the trial judge may cure an improper argument of government counsel. See Annot. 84 A.L.R. 784, Sub-section VI, p. 795. He contends, however, that here the comment of counsel was so palpably improper as to be incurable by the conventional instruction.

In the first place, the trial court was correct in its view that the comment of counsel was not directed to the failure of the appellant to testify, but was primarily directed to the failure of the evidence to furnish any explanation for the unreported receipt of the $3,570.00. Counsel for the government merely answered appellant's insinuation that he had received the money as an agent for someone else. If, however, the challenged comment can be said to have the effect of focusing attention on appellant's failure to testify, we think it was cured by the court's instructions in that respect.

The appellant next challenges the sufficiency of the evidence to prove that the omission of the $3,570.00 item constituted a knowingly false return. Of course failure to file a correct return does not necessarily constitute a fraudulently false return. See Davis v. Commissioner, 10 Cir., 184 F.2d 86, 22 A.L.R.2d 967. The omission or inaccuracy must relate to a knowingly material matter. But here the evidence shows without dispute that the appellant received the money from the sale of the sheep and deposited it in his account; and, his work sheets show that it was income to him. There was only an insinuation that he received it for someone else, and the jury was fully justified in finding that it was income and that the appellant knew that it was reportable income. This is not a case like Davis v. Commissioner, supra, it is simply a case where the failure to report a large item of income justified a permissible inference that it was material and knowingly omitted.

During an investigation by the Internal Revenue Department of appellant's income tax liability for the years 1945 to 1950, inclusive, the appellant was examined orally by the Internal Revenue Agent. During one of these examinations he was asked to submit a net worth statement for the five years in question. In collaboration with his certified public accountant, and based upon information furnished by the appellant, the accountant submitted the net worth statement signed by the appellant and his wife. This statement showed the sale in 1949 of land in Elbert County, Colorado, for the sum of $45,000.00 with a cost basis in 1943 of $25,000.00, and an additional cost of $5,000.00, making a total cost of $30,000.00 and a net gain of $15,000.00. The evidence showed without much dispute that the cost of the land in question was $10,000.00, not $25,000.00, and that any additional cost was in the form of improvements contributed by his own labors. The evidence also showed that while the investigation was in progress, the appellant contacted the real estate agent who handled the transaction, suggesting that he gave $10,000.00 in cash and "$10,000.00 in bulls and wet cows". When...