U.S. v. Burton

• Decision Date: 11 July 1984
• Docket Number: No. 83-2579,83-2579
• Citation: 737 F.2d 439
• Parties: 84-2 USTC P 9689, 15 Fed. R. Evid. Serv. 1925 UNITED STATES of America, Plaintiff-Appellee, v. Eventius T. BURTON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 439

737 F.2d 439

84-2 USTC P 9689, 15 Fed. R. Evid. Serv. 1925

UNITED STATES of America, Plaintiff-Appellee, v. Eventius T. BURTON, Defendant-Appellant.

No. 83-2579.

United States Court of Appeals Fifth Circuit.

July 11, 1984.

David Flynn, Beaumont, Tex., Scott McLarty, Larry E. Blount, Athens, Ga., for defendant-appellant.

Robert J. Wortham, U.S. Atty., J. Michael Bradford, Asst. U.S. Atty., Beaumont, Tex., for plaintiff-appellee.

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

Before GARZA, GARWOOD and HIGGINBOTHAM, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Eventius Burton appeals his conviction by a jury on two counts of failing to file income tax returns and four counts of filing false withholding forms, contrary to 26 U.S.C. Secs. 7203, ¹ 7205. ² Burton argues that the district court effectively withheld the essential element of willfulness from the jury by instructing them that his alleged good faith belief that wages were not taxable income was not a defense. ³ Burton also argues that the district judge should have allowed a defense expert to testify concerning the legal uncertainty over whether wages are income. Finally, Burton charges error in the judge's appointment of a jury foreman. We are persuaded that the instruction regarding Burton's good faith was incorrect but that the court did not err in excluding the opinion of the expert regarding the law or in selecting a jury foreman. We reverse and remand for a new trial.

I

Evidence at trial established that Burton failed to file required income tax returns and filed withholding forms stating that he was exempt from paying taxes. Burton testified to his good faith belief that wages were not income, and proffered evidence that at relevant times he did not know that the law defined wages as income and consequently did not have the requisite intent to violate the law. Of course if he had no income Burton had no obligation to file a return and his statements to his employers that he was exempt would have been true.

Over Burton's objection the district court instructed the jury that:

The court has ruled as a matter of law that a good faith belief that wages are not income is not a defense to the charges in this case.

Later he instructed the jury that:

The test for willfulness under these counts is whether the Defendant intentionally failed to file tax returns under the charged years when he knew the law required him to do so.

Finally, when the government objected to Burton's attorney referring in his closing argument to Burton's state of mind, the district court again stated:

The Court has instructed the Jury that [a] good faith belief that wages are not income is not a defense in this case. Go ahead.

II

Both the failure to file and false filing offenses require that an accused have acted "willfully," that is, intentionally in violation of a known legal duty. United States v. Pomponio, 429 U.S. 10, 12, 97 S.Ct. 22, 23, 50 L.Ed.2d 12 (1976). This "implements the pervasive intent of Congress to construct penalties that separate the purposeful tax violator from the well-meaning, but easily confused, mass of taxpayers." United States v. Bishop, 412 U.S. 346, 361, 93 S.Ct. 2008, 2017, 36 L.Ed.2d 941 (1973). Similarly, "Congress did not intend that a person by reason of a bona fide misunderstanding as to his liability for the tax ... should become a criminal by his mere failure to measure up to the prescribed standard of conduct." United States v. Murdock, 290 U.S. 389, 396, 54 S.Ct. 223, 226, 78 L.Ed. 381 (1933). See also United States v. Garber, 607 F.2d 92, 97-98 (5th Cir.1979) (en banc ).

A bona fide misunderstanding of the tax laws can negate the essential element of willfulness and in this sense is a "defense." There is no question but that the district court's instructions took Burton's alleged bona fide misunderstanding of the taxability of wages out of the definition of willfulness. Nor is there any dispute but that such instructions would ordinarily be error, as a supplanting of the jury's role as fact finder with respect to defendant's state of mind. But the government argues that such a claim of subjective innocence must be "objectively reasonable." In short, the government urges us to conclude that it is the judge who first decides whether a defendant's claim is sufficiently credible to be considered by the jury. Persuaded that a limit of objective reasonableness improperly diminishes the jury's role, we reject the argument.

Beyond dispute, wages are income. Lonsdale v. Commissioner, 661 F.2d 71 (5th Cir.1981). Equally so, a defendant's specific intent is an essential element of the crimes alleged. See, e.g., United States v. Pomponio, 429 U.S. at 12, 97 S.Ct. at 23. Yet, as far-fetched as it may be, Burton's claim that he did not know that the tax laws included wages in taxable income was for the jury because the government is never entitled to a directed verdict in a criminal jury trial. United States v. Johnson, 718 F.2d 1317 (5th Cir.1983) (en banc ).

We have previously allowed the jury to decide whether the taxpayer held a good faith belief that wages were not taxable income. United States v. Herzog, 632 F.2d 469, 473 (5th Cir.1980). Courts have also allowed the jury to decide the defendant's credibility when he claims he believed that to be taxable dollars must be paid in gold. See United States v. Ware, 608 F.2d 400 (10th Cir.1979). Similarly, we have vacated bench convictions where the defendant had a good faith, although indisputably wrong, belief that he was not required to file quarterly business returns if he didn't have the money to pay the tax owed. United States v. Pinner, 561 F.2d 1203 (5th Cir.1977). In the context of whether the defendant willfully violated the tax laws because he did not think his conduct would result in an understatement of income, we held that it was plain error for the trial court to invite the jury to consider what other people similarly situated would have reasonably realized. Mann v. United States, 319 F.2d 404, 409 (5th Cir.1963), cert. denied, 375 U.S. 986, 84 S.Ct. 520, 11 L.Ed.2d 474 (1964). We explained:

The crime of income tax evasion must be accompanied by a specific intent on the part of the accused to defeat or evade the tax, which must be proved by independent evidence. Spies v. United States, 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 (1943). Under the instruction here involved, the jury is invited to speculate as to what any other person similarly situated to Dr. Mann and with his knowledge, would reasonably have expected to be the consequences of the conduct under consideration as shown by the evidence. The test is whether Dr. Mann himself willfully attempted to evade or defeat the tax.

Id. (emphasis added). See also Gaunt v. United States, 184 F.2d 284, 291 (1st Cir.1950), cert. denied, 340 U.S. 917, 71 S.Ct. 350, 95 L.Ed. 662 (1951), approving a jury instruction providing that even gross negligence could not defeat a good faith claim.

The government, seeking support for its "objectively reasonable" limitation on good faith misunderstandings of the law defenses, relies on decisions holding that it is not a defense to a willful violation of the Revenue Code for the defendant to act out of disagreement with the law or out of a belief that the law is unconstitutional. See, e.g., United States v. Douglass, 476 F.2d 260, 264 (5th Cir.1973); United States v. Quilty, 541 F.2d 172, 175 (7th Cir.1976); United States v. Kelley, 539 F.2d 1199, 1204 (9th Cir.), cert. denied, 429 U.S. 963, 97 S.Ct. 393, 50 L.Ed.2d 332 (1976). It is immediately apparent that the premise of these decisions is that in each case the defendant knew of the tax law and was not uncertain about the duty Congress meant to impose.

Those who refuse to pay taxes as a protest against governmental policies are not asserting any misapprehension of the duty imposed by the statute; their violation of the statutory command is thus willful, and they must suffer the penalties attending their act of civil disobedience. United States v. Smith, 618 F.2d 280, 282 (5th Cir.), cert. denied, 449 U.S. 868, 101 S.Ct. 203, 66 L.Ed.2d 87 (1980). Those who believe, even in good faith, that the income tax law is unconstitutional are similarly willful violators of the tax law if they understand the obligations the statute purports to impose upon them. United States v. McCarty, 665 F.2d 596, 597 (5th Cir.), cert. denied, 456 U.S. 991, 102 S.Ct. 2273, 73 L.Ed.2d 1287 (1982). One who believes a statute to be unconstitutional is entitled to challenge it in court, see 26 U.S.C. Sec. 7422, but disobeys it only at the risk of criminal penalties should the constitutionality of the statute be upheld. ⁴ The defendant's good faith belief that the statute is unconstitutional does not negate the willfulness of his defiance of the statute, and such a defendant is not entitled to a jury instruction that his belief in the statute's unconstitutionality shields him from liability for willful violation of the statute. United States v. McCarty, 665 F.2d at 597; United States v. Erickson, 676 F.2d 408, 411 (10th Cir.), cert. denied, 459 U.S. 853, 103 U.S. 118, 74 L.Ed.2d 103 (1982). Hayward v. Day, 619 F.2d 716, 717 (8th Cir.), cert. denied, 446 U.S. 969, 100 S.Ct. 2951, 64 L.Ed.2d 830 (1980).

Thus, we agree with the government that there is a difference between willful defiance of a statute and ignorance of a statute's existence or meaning. These distinctions, while arbitrary at their edges, distinguish citizens who simply choose not to obey a known duty from those who act out of ignorance or misunderstanding. Although the jury must, in any event, determine whether the defendant willfully violated the statute, these distinctions will control whether or not the defendant's good faith beliefs will provide a defense to the criminal charge as to which the jury should be instructed. Thus, when this issue...