Neaderland v. CIR, No. 435

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtLUMBARD, , ANDERSON, Circuit , and DOOLING
Citation424 F.2d 639
PartiesRobert NEADERLAND, Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Appellee.
Decision Date10 April 1970
Docket NumberNo. 435,Docket 34056.

424 F.2d 639 (1970)

Robert NEADERLAND, Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE, Appellee.

No. 435, Docket 34056.

United States Court of Appeals, Second Circuit.

Argued February 26, 1970.

Decided April 10, 1970.


424 F.2d 640

Carl F. Bauersfeld, Washington, D. C. (Robert Ash, and Ash, Bauersfeld, Burton & Mooers, Washington, D. C., on the brief), for appellant.

John M. Brant, Dept. of Justice, Washington, D. C. (Johnnie M. Walters, Asst. Atty. Gen., Lee A. Jackson, and Joseph M. Howard, Dept. of Justice, Washington, D. C., on the brief), for appellee.

Before LUMBARD, Chief Judge, ANDERSON, Circuit Judge, and DOOLING, District Judge.*

ANDERSON, Circuit Judge:

Taxpayer Robert Neaderland was employed by Douglas L. Elliman & Co., Inc., of which he was a vice president and director, during 1954 and 1955 as a New York City real estate broker-salesman. He earned commissions of $58,573.31 and $96,307.23 from his employer for these two years and claimed business expense deductions of $31,000 and $38,000, respectively, in his 1954 and 1955 federal personal income tax returns. These deductions were based largely on undocumented costs allegedly incurred in entertaining customers.

The Internal Revenue Service initiated an investigation of these returns in 1957 which resulted in Neaderland's indictment in 1961 on charges of willfully attempting to evade payment of income tax by filing false and fraudulent returns, in violation of 26 U.S.C. § 7201.

424 F.2d 641
His jury trial began March 10, 1965, and at the close of the Government's case on March 15th, the taxpayer's motion for a judgment of acquittal was granted

In 1962 Neaderland filed "amended" returns for 1954 and 1955 in which he reduced his claimed business expense deductions to $12,176.33 and $17,909.13,1 respectively, and paid approximately $27,500 in additional taxes. The Commissioner, however, in August of 1966 determined that only $2,000 was allowable to the taxpayer as a business expense deduction in each of those two years and computed and fixed deficiencies and penalty additions to Neaderland's tax of almost $48,0002 under 26 U.S.C. § 6653(b), because of fraud in the initial 1954 and 1955 returns. On appeal, the Tax Court found that the taxpayer had not carried his burden of proving deductions larger than the $2,000 allowed. It also found, largely from the confusion and evasiveness of Neaderland's own testimony, that at least a part of the underpayment in 1954 and 1955 was due to fraud with intent to evade the tax, so that the statute of limitations was no bar to collection of these deficiencies.

The Tax Court further found no merit in Neaderland's argument that his prior acquittal in the 1965 criminal case barred a finding of fraud in the subsequent civil proceeding through the doctrine of collateral estoppel. This is the only issue before us on the present appeal. We affirm.

A taxpayer's prior acquittal of attempted tax evasion through fraud does not bar the Commissioner from proving his fraud civilly, whether the criminal acquittal was upon a jury verdict, Helvering v. Mitchell, 303 U.S. 391, 397-398, 58 S.Ct. 630, 82 L.Ed. 917 (1938), or upon a motion for judgment of acquittal pursuant to F.R.Cr.P. 29, United States v. Real Estate Boards, 339 U.S. 485, 492-494, 70 S.Ct. 711, 94 L.Ed. 1007 (1950). This rule, which declines to apply the doctrine of collateral estoppel is based on a recognition of certain fundamental dissimilarities in the principles which govern the litigation of these virtually identical fraud issues in criminal and civil trials.

When a civil trial follows criminal proceedings which were based on the same facts, a different cause of action is involved and the doctrine of collateral estoppel rather than that of res judicata must be considered. 1B J. Moore, Federal Practice ¶ 0.4181, p. 2701 (2d ed.). In Cromwell v. County of Sac, 94 U.S. 351, 353, 24 L.Ed. 195 (1877), Mr. Justice Field elaborated this doctrine as follows:

"the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered. In all cases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in
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112 practice notes
  • In re Four Seasons Securities Laws Litigation, No. 55
    • United States
    • United States District Courts. 10th Circuit. Western District of Oklahoma
    • January 18, 1974
    ...Strachan Shipping Company v. Shea, 406 F.2d 521 (5 Cir. 1969), cert. den., 395 U.S. 921, 89 S.Ct. 1773, 23 L.Ed.2d 238; Neaderland v. CIR, 424 F.2d 639 (2 Cir. 1970), cert. den., 400 U.S. 827, 91 S.Ct. 53, 27 L.Ed.2d 56, and cases cited Clark argues that Ohio deliberately chose to assert it......
  • Cobb v. Pozzi, Docket No. 02-7218.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • December 11, 2003
    ...raising the same issue in a subsequent proceeding in which his burden will be lighter."). For instance, in Neaderland v. Commissioner, 424 F.2d 639 (2d Cir.1970), we declined to apply collateral estoppel where a defendant was acquitted on criminal charges of tax fraud and sought to accord t......
  • Cobb v. Pozzi, Docket No. 02-7218.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • December 11, 2003
    ...raising the same issue in a subsequent proceeding in which his burden will be lighter."). For instance, in Neaderland v. Commissioner, 424 F.2d 639 (2d Cir.1970), we declined to apply collateral estoppel where a defendant was acquitted on criminal charges of tax fraud and sought to accord t......
  • Manning v. Commissioner, Docket No. 4917-90.
    • United States
    • United States Tax Court
    • March 30, 1993
    ...USTC ¶ 9109] 470 F.2d 87 (1st Cir. 1972); Neaderland v. Commissioner [Dec. 29,635], 52 T.C. 532, 540 (1969), affd. [70-1 USTC ¶ 9340] 424 F.2d 639 (2d Cir. We find a number of the indicia of fraud present in this case, as discussed below. b. Fraud With Respect to Old Spanish Trail Property—......
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112 cases
  • In re Four Seasons Securities Laws Litigation, No. 55
    • United States
    • United States District Courts. 10th Circuit. Western District of Oklahoma
    • January 18, 1974
    ...Strachan Shipping Company v. Shea, 406 F.2d 521 (5 Cir. 1969), cert. den., 395 U.S. 921, 89 S.Ct. 1773, 23 L.Ed.2d 238; Neaderland v. CIR, 424 F.2d 639 (2 Cir. 1970), cert. den., 400 U.S. 827, 91 S.Ct. 53, 27 L.Ed.2d 56, and cases cited Clark argues that Ohio deliberately chose to assert it......
  • Cobb v. Pozzi, Docket No. 02-7218.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • December 11, 2003
    ...raising the same issue in a subsequent proceeding in which his burden will be lighter."). For instance, in Neaderland v. Commissioner, 424 F.2d 639 (2d Cir.1970), we declined to apply collateral estoppel where a defendant was acquitted on criminal charges of tax fraud and sought to accord t......
  • Cobb v. Pozzi, Docket No. 02-7218.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • December 11, 2003
    ...raising the same issue in a subsequent proceeding in which his burden will be lighter."). For instance, in Neaderland v. Commissioner, 424 F.2d 639 (2d Cir.1970), we declined to apply collateral estoppel where a defendant was acquitted on criminal charges of tax fraud and sought to accord t......
  • Manning v. Commissioner, Docket No. 4917-90.
    • United States
    • United States Tax Court
    • March 30, 1993
    ...USTC ¶ 9109] 470 F.2d 87 (1st Cir. 1972); Neaderland v. Commissioner [Dec. 29,635], 52 T.C. 532, 540 (1969), affd. [70-1 USTC ¶ 9340] 424 F.2d 639 (2d Cir. We find a number of the indicia of fraud present in this case, as discussed below. b. Fraud With Respect to Old Spanish Trail Property—......
  • Request a trial to view additional results

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