U.S. v. Barnett

• Decision Date: 20 September 1991
• Docket Number: No. 90-4951,90-4951
• Citation: 945 F.2d 1296
• Parties: -5820, 91-2 USTC P 50,519, 34 Fed. R. Evid. Serv. 372 UNITED STATES of America, Plaintiff-Appellee, v. Gary W. BARNETT, Defendant-Appellant. Fifth Circuit
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1296

945 F.2d 1296

68 A.F.T.R.2d 91-5820, 91-2 USTC P 50,519,

34 Fed. R. Evid. Serv. 372

UNITED STATES of America, Plaintiff-Appellee, v. Gary W. BARNETT, Defendant-Appellant.

No. 90-4951

Summary Calendar.

United States Court of Appeals,

Fifth Circuit.

Sept. 20, 1991.

Michael Hatchell, Tyler, Tex. (court-appointed), for defendant-appellant.

Bob Wortham, U.S. Atty., Tyler, Tex., Robert E. Lindsay, Chief, Yoel Tobin, Alan Hechtokopf, Attys., Criminal Appeals & Tax Enforcement, Tax Div., Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeals from the United States District Court for the Eastern District of Texas.

Before GARWOOD, HIGGINBOTHAM and BARKSDALE, Circuit Judges.

GARWOOD, Circuit Judge:

Defendant-appellant Gary W. Barnett (Barnett) appeals his conviction, following a jury trial, of three counts of willful failure to file individual federal income tax returns for the years 1983-85 in violation of the Internal Revenue Code (IRC) 26 U.S.C. § 7203. Barnett in this appeal challenges various aspects of the district court's jury instructions and certain of its evidentiary rulings. Concluding that Barnett's contentions on appeal present no reversible error, we accordingly affirm.

Barnett is a tax protestor who claims he was not required to file federal income tax returns because (i) wages are not income under the tax laws and he therefore did not earn "income" above the statutory minimum triggering the filing requirement and (ii) filing a tax return is voluntary and the Internal Revenue Service (IRS) will file a return on behalf of any taxpayer who chooses not to file.

I. The Jury Instructions

A. Instructions Regarding the Subjective Standard

The Supreme Court has repeatedly held that the defendant charged with willful failure to file a tax return must have willfully failed to file knowing that he had a legal duty to do so. Cheek v. United States, --- U.S. ----, 111 S.Ct. 604, 112 L.Ed.2d 617 (1990); United States v. Pomponio, 429 U.S. 10, 97 S.Ct. 22, 50 L.Ed.2d 12 (1976); United States v. Bishop, 412 U.S. 346, 93 S.Ct. 2008, 36 L.Ed.2d 941 (1973).

A defendant charged with willful failure to file a tax return is therefore entitled to instructions that adequately inform the jury that the defendant is not guilty if he holds the mistaken, but good faith, belief that he is not required to file a tax return (at least assuming, as is the case here, that such is raised by the evidence). Cheek, supra; United States v. Burton, 737 F.2d 439 (5th Cir.1984). The instructions must make clear that the legal standard for the defendant's mistaken belief is a subjective, rather than an objective or "reasonableness," standard. Id.

Barnett challenges the jury instructions relating to his claim of good faith mistaken belief. A challenged jury instruction must be assessed in light of the entire jury charge. United States v. Eargle, 921 F.2d 56, 57 (5th Cir.1991). The relevant instructions in this case are therefore set forth in full as follows:

"You are instructed that, while a good faith disagreement with the law is not a defense, a good faith misunderstanding of it is. Thus, if the defendant honestly held a mistaken view of what the law requires in relation to the filing of income tax returns by persons in his category, he did not act willfully in failing to file the returns in question; but if his purported misunderstanding of the law was not in good faith, then he may be found to have acted willfully. The grounds on which the defendant bases his individual claim of good faith in a belief that his conduct was lawful may be considered by the jury in deciding whether he actually acted in good faith.

"Defendant asserts that he did not have the requisite intent to violate the law, because he had a good faith misunderstanding of his obligation to file. Whether or not defendant had such a good faith misunderstanding is a question of fact to be resolved by you as the finders of the facts. However, you are instructed that a disagreement with the law, or a belief that the law is unconstitutional, does not constitute a good faith misunderstanding. It is the duty of all citizens to obey the law whether they agree with it or not.

"....

"To prove the requisite intent, the government must show that the defendant intended not to file income tax returns which he knew he was required to file, at the time when he was required to file them.

"The question of intent is a matter for you, as jurors, to determine. Intent is a state of mind. It is not possible to look into a person's mind to see what went on at a given time in the past. The finder of fact in a case such as this must take into consideration all of the facts and circumstances shown by the evidence, including the exhibits, and determine from all such facts and circumstances whether it was the intent of the defendant at the time in question to fail to file his income tax returns.

"Intent may be inferred from acts; and inferences may be drawn from a combination of acts, although each act standing alone may seem unimportant. Thus, intent is a question of fact to be determined from all the evidence.

"....

"You are instructed if you find evidence of intent to fail to file in one year, you can consider this evidence of intent to fail to file in prior or subsequent years.

"In determining what the defendant's intent was, you may take into consideration any evidence you find of the concealment of facts by the defendant, if any."

Barnett specifically challenges the sentence in the first paragraph above which reads: "The grounds on which the defendant bases his individual claim of good faith in a belief that his conduct was lawful may be considered by the jury in deciding whether he actually acted in good faith." Barnett claims that this sentence either misled or confused the jury into thinking that they were to apply an objective rather than a subjective standard. ¹

We find this argument to be without merit. As the Supreme Court said in Cheek, supra, "Of course, the more unreasonable the asserted beliefs or misunderstandings are, the more likely the jury will consider them to be nothing more than simple disagreement with known legal duties imposed by the tax laws...." Cheek, 111 S.Ct. at 611-12. Thus, the Court, while requiring a subjective standard for such a mistaken belief, clearly anticipated and condoned the jury's consideration of the bases upon which the defendant claims to have held his subjective belief as properly relevant to the ultimate inquiry of whether the defendant in fact held such belief. The instruction challenged in this case does nothing more than articulate this standard.

In United States v. Whiteside, 810 F.2d 1306 (5th Cir.1987), the defendant challenged the following similar instruction: " 'But if a person acts without reasonable ground for belief that his conduct is lawful, it is for you to decide whether he acted in good faith or whether he willfully intended to fail to file a tax return.' " Id. at 1310-11. This Court upheld the similar instructions in Whiteside, including the above sentence. The corresponding sentence of which Barnett complains is, in fact, clearer than that in Whiteside since it removed the word "reasonable" entirely from the charge.

We conclude that Barnett's complaint of the instructions in this respect is without merit.

B. The Statements of the Law

Barnett also challenges the trial court's instructions regarding a taxpayer's duty to file a return.

The first challenge in this respect relates to an instruction given during the trial but before the evidence closed. One of Barnett's asserted beliefs was that he did not have to file a tax return because the IRS would file one on his behalf and assess him any taxes owed. To advance this theory, defense counsel asked the government's summary IRS witness whether he was familiar with IRC section 6020(b) or any other provision in the IRC which provided that the IRS would file a tax return on behalf of a taxpayer. After a brief colloquy, the court stated that it would research and inform the jury on the correct state of the law.

Following cross and redirect examination of the IRS witness and a short recess, the defense called Barnett as its first witness. Before his testimony began, however, the court gave the following instruction to the jury:

"Before we begin with this testimony, members of the jury, I instruct you that in the case of United States against Milliken, a case decided by the Court of Appeals for the Fifth Circuit in 1979, it was held by that court that there is no merit to a defendant's claim of entitlement to an instruction that the Internal Revenue Service was under a duty pursuant to Title 26, United States Code, Section 6020(b)(1) to prepare his tax return. In other words, the Internal Revenue Service is under no duty under the law to prepare a taxpayer's tax return. That decision has not been overruled since then. It's still the law. All right. You may proceed."

Though Barnett does not challenge the legal accuracy of this instruction, he does complain that the instruction, made immediately before he was to testify as to his beliefs about the tax laws, undermined his testimony and implied to the jury that he had no reasonable grounds for his beliefs, thus insinuating the forbidden objective standard. We reject this contention.

The jury must know the law as it actually is respecting a taxpayer's duty to file before it can determine the guilt or innocence of the accused for failing to file as required. Defense counsel raised the inference that the IRS actually has some statutory duty to file returns for delinquent taxpayers such as might relieve those taxpayers from the duty to file themselves. The court therefore needed to properly instruct...