U.S. v. Hogan, 87-2106

• Decision Date: 15 September 1988
• Docket Number: No. 87-2106,87-2106
• Citation: 861 F.2d 312
• Parties: -318, 88-2 USTC P 9593 UNITED STATES of America, Appellee, v. John J. HOGAN, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 312

861 F.2d 312

63 A.F.T.R.2d 89-318, 88-2 USTC P 9593

UNITED STATES of America, Appellee, v. John J. HOGAN, Defendant, Appellant.

No. 87-2106.

United States Court of Appeals, First Circuit.

Heard Sept. 15, 1988.

Decided Nov. 15, 1988.

Scott McLarty, for defendant, appellant.

S. Theodore Merritt, Asst. U.S. Atty., with whom Frank L. McNamara, Jr., U.S. Atty., Boston, Mass., was on brief, for appellee.

Before BOWNES and BREYER, Circuit Judges, and ATKINS, ^* Senior District Judge.

ATKINS, Senior District Judge.

John J. Hogan was indicted and convicted of tax evasion, a violation of Title 26, U.S.C. Sec. 7201. Hogan appeals his conviction urging three separate grounds of error. We affirm.

Hogan, a bus driver for Greyhound Bus Lines since 1960, filed income tax returns until 1979. During 1978 and 1979, he had tax withheld from his salary. For the next four years, however, Hogan failed to file a return and also claimed to be exempt from taxes by filing fraudulent Withholding Allowance Certificates thereby avoiding any withholding from his paycheck.

Hogan received either W-2 forms or 1099 forms at the end of each year showing his total earnings. In 1980, 1981, and 1982, Hogan co-signed credit applications and completed a personal financial statement that reported an income of thirty thousand dollars. In 1982, Hogan met with an Internal Revenue Service agent who informed him that he was liable for a tax deficiency. In 1983, he received a certified letter from an agent informing Hogan that he was being investigated for failure to file. He answered the letter by citing IRS regulations but refused to meet with the agent.

Hogan was indicted on four counts of willfully attempting to evade and defeat income taxes by filing fraudulent Withholding Allowance Certificates for the years 1981, 1982, 1983, and 1984, and was convicted on all four counts. At the trial, the government introduced evidence to prove that Hogan had violated section 7201 by instructing his employer, Greyhound Bus Lines, not to withhold taxes from his paycheck. The government stressed that the W-4 forms filed by Hogan were fraudulent because he claimed to be exempt from taxes when, in fact, a tax liability was due and owing. The act of filing fraudulent exemption certificates joined with the failure to file a tax return, the government claimed, was sufficient to prove that Hogan attempted to evade or defeat the payment of taxes.

The appellant argues that: (1) the indictment insufficiently charged the elements of a felony and thus was fatally deficient; (2) the government's failure to assess taxes

due precluded charging evading or defeating taxes; and (3) the trial court erred in its instruction to the jury by reformulating the instruction into a misstatement of law.

INDICTMENT

The appellant urges that tax evasion is the most serious and most inclusive of all of the tax offenses and encompasses lesser included offenses that combine with each other or with other elements. Section 7201 states that one violates that provision by willfully attempting in any manner to evade or defeat income taxes, language that could conceivably encompass a myriad of lesser offenses. The Supreme Court defined the distinction between the felony of tax evasion and all lesser included offenses that in some way comprise the felony in Spies v. United States, 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 (1943). The Court concluded that to support the charge of tax evasion requires that acts or offenses be charged apart from the acts which constitute the lesser included offense. In this case, Hogan asserts, there were no other acts or offenses charged; the indictment charged a misdemeanor and nothing more. Therefore, Hogan argues, he has been convicted of a felony by committing acts that, standing alone, comprise a misdemeanor. The indictment must contain allegations of acts or offenses other than filing fraudulent W-4 forms to sustain the crime of tax evasion. Not having done so, the indictment, the appellant urges, is fatally defective.

The indictment charged that Hogan willfully attempted to evade the payment of his taxes by filing false Withholding Allowance Certificates claiming to be exempt. Hogan's argument that the indictment does not sufficiently charge the elements of a felony is incorrect. His reliance on the Supreme Court's decision in Spies misconstrues the rationale of that case. In Spies, the Court concluded that to support the charge of tax evasion required that acts or offenses be charged apart from the acts which constitute the lesser included offense. The indictment charged Hogan with attempting to evade or defeat the payment of income tax, an act or offense that is apart from the fraudulent filing of Withholding Allowance Certificates, a misdemeanor.

An indictment is sufficient if it contains the elements of the crime charged and fairly informs the defendant of the charge against which he must defend. United States v. Serino, 835 F.2d 924, 929 (1st Cir.1987). The Serino court also noted that an indictment is generally sufficient if it sets forth the offense in the words of the statute itself as long as the words set forth all of the elements without uncertainty or ambiguity. The indictment in this case charged:

On or about the 15th day of April, 1981, in the District of Massachusetts, John J. Hogan a resident of North Attleboro, Massachusetts, did willfully attempt to evade or defeat the payment of a large part of the income tax due and owing by him to the United States of America for the calendar year 1980, in the amount of $4,850.91, by filing fraudulent Withholding Allowance Certificates with his employer claiming to be exempt from income tax withholding. In violation of Title 26, United States Code, Section 7201.

The second, third, and fourth counts charged the same language for the years 1982, 1983, and 1984. Title 26 U.S.C. Sec. 7201 reads:

Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ... or imprisoned not more than 5 years, or both, together with the costs of prosecution.

Filing fraudulent W-4 forms is a misdemeanor under Title 26 U.S.C. Sec. 7205. ¹ But Section 7207 requires the willful filing of a document known to be false or fraudulent in any material manner. The elements here involved are willfulness and the commission of the prohibited act. Section 7207 does not, however, require that the act be done as an attempt to evade or defeat taxes. Conduct could therefore violate Sec. 7207 without violating Sec. 7201 where the false statement, though material, does not constitute an attempt to evade or defeat taxation because it does not have the requisite effect of reducing the stated tax liability.

not every fraudulent filing of a W-4 need be done as a willful attempt to evade or defeat taxes. In Sansone v. United States, 380 U.S. 343, 352, 85 S.Ct. 1004, 1010, 13 L.Ed.2d 882 (1965), the Court addressed this question in the context of a lesser included offense.

Id. Therefore the indictment not only charged the attempt to evade or defeat taxes but also the commission of the affirmative act of filing fraudulent statements. The appellant could have violated section 7205, a misdemeanor, by merely willfully filing the fraudulent W-4s without attempting to evade the payment of taxes. The government, however, in the indictment asserted the element not required for a conviction under section 7205 and adequately notified Hogan of the felony against which he had to defend.

TAX ASSESSMENT

Section 7201 defines two distinct crimes: (1) the willful attempt to evade or defeat the "assessment" of a tax, and (2) the willful attempt to evade or defeat the "payment" of a tax. See Sansone, 380 U.S. at 354, 85 S.Ct. at 1011. The first crime includes evading the government's attempt to ascertain a tax liability. The second crime addresses an individual's evasion of the payment of that tax. United States v. Dack, 747 F.2d 1172, 1174 (7th Cir.1984). The elements of both crimes are the same: (1) willfulness, (2) existence of a tax deficiency, and (3) an affirmative act constituting an evasion or attempted evasion of the tax. Sansone, 380 U.S. at 351, 85 S.Ct. at 1010.

The appellant Hogan was charged with the latter crime, attempted evasion of the payment of a tax. He argues that without a proper assessment of the tax due and owing, the government cannot prove an attempted evasion; he argues that he relied upon...