U.S. v. Lawson, 81-1541

• Decision Date: 26 March 1982
• Docket Number: No. 81-1541,81-1541
• Parties: 82-1 USTC P 9197, 9 Fed. R. Evid. Serv. 1514 UNITED STATES of America, Plaintiff-Appellee, v. William S. LAWSON, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 923

670 F.2d 923

82-1 USTC P 9197, 9 Fed. R. Evid. Serv. 1514

UNITED STATES of America, Plaintiff-Appellee, v. William S. LAWSON, Jr., Defendant-Appellant.

No. 81-1541.

United States Court of Appeals Tenth Circuit.

Submitted Feb. 2, 1982.

Decided Feb. 12, 1982.

Rehearing Denied March 26, 1982.

Richard L. Stradley, Missoula, Mont., for defendant-appellant.

Richard A. Stacy, U. S. Atty., and Jeffrey C. Fisher, Asst. U. S. Atty., Cheyenne, Wyo., for plaintiff-appellee.

Before BARRETT, DOYLE and LOGAN, Circuit Judges.

LOGAN, Circuit Judge.

William S. Lawson appeals his convictions by a jury for failing to file 1978 and 1979 federal income tax returns, violations of I.R.C. § 7203, and for supplying a false and fraudulent withholding certificate to his employer in 1979, a violation of I.R.C. § 7205. Lawson contends that the trial court erred in denying various pretrial motions and motions for acquittal, in making certain evidentiary rulings, in instructing the jury, and in sentencing the defendant. He also maintains that the jury's verdict was against the weight of the evidence and contrary to law.

I Pretrial Motions

Lawson asserts that the trial court erred in denying his pretrial motions (1) to dismiss because his wages were not income within the meaning of the Internal Revenue Code and the Constitution, (2) to hold his trial in Casper, Wyoming, (3) to exclude federal government employees from the jury panel, and (4) to inspect and copy jury selection records.

The defendant's wages for personal services are income under the Internal Revenue Code. Congress has specifically provided that "gross income means all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, and similar items...." I.R.C. § 61(a)(1). We must broadly interpret the definition to include all gains not specifically exempted. Commissioner v. Kowalski, 434 U.S. 77, 82-3, 98 S.Ct. 315, 318-319, 54 L.Ed.2d 252 (1977). Notwithstanding Lawson's belief that his wages are not gains or profits but merely what he has received in an equal exchange for his services, the Internal Revenue Code clearly includes compensation of this nature within reportable gross income. None of the cases cited by Lawson requires a contrary result. Lawson's constitutional argument is specious. See United States v. Russell, 585 F.2d 368, 370 (8th Cir. 1978); Kasey v. Commissioner, 457 F.2d 369, 370 (9th Cir.), cert. denied, 409 U.S. 869, 93 S.Ct. 197, 34 L.Ed.2d 120 (1972); Porth v. Brodrick, 214 F.2d 925, 926 (10th Cir. 1954).

The trial judge committed no reversible error in denying Lawson's request to hold his trial in Casper rather than Cheyenne, both of which are in the District of Wyoming. The Sixth Amendment provides that a defendant has the right to a trial "by an impartial jury of the State and district wherein the crime shall have been committed...." U.S.Const. Amend. VI. Federal Rule of Criminal Procedure 18 adds that the "court shall fix the place of trial within the district with due regard to the convenience of the defendant and the witnesses and the prompt administration of justice." The trial court may weigh the prejudice alleged by defendant against the concern of providing a speedy trial. United States v. Brown, 535 F.2d 424, 429-30 (8th Cir. 1976); United States v. Florence, 456 F.2d 46, 50 (4th Cir. 1972). The transcript reveals that Lawson's only justification for holding the trial in Casper was Casper's proximity to his own residence; Lawson alleged no specific prejudice. The judge explained that he sat in Casper only one week per month, he had a heavy docket, and his primary consideration was to try Lawson's case within the requirements of the Speedy Trial Act. Under these circumstances we cannot find that the trial court abused its discretion in holding the trial in Cheyenne.

The trial court did not commit error in failing to exclude from the jury for cause all government employees. Lawson asserts that because their pay is dependent upon taxes, government employees are inherently biased in cases involving failure to file income tax returns. Alternatively, Lawson argues that the trial court failed to inquire adequately into any actual bias of prospective jurors who were government employees. The courts have long rejected contentions that government employees must automatically be stricken from juries considering violations of federal laws. See Dennis v. United States, 339 U.S. 162, 70 S.Ct. 519, 94 L.Ed. 734 (1950); United States v. Wood, 299 U.S. 123, 57 S.Ct. 177, 81 L.Ed. 78 (1936); Marshall v. United States, 293 F.2d 561, 563 (10th Cir.), cert. denied, 368 U.S. 898, 82 S.Ct. 175, 7 L.Ed.2d 94 (1961). We also reject Lawson's alternative contention. Lawson never requested that the trial court inquire into bias of potential jurors who were government employees. Lawson did file a pretrial motion requesting that the parties be permitted to so inquire, but when the judge postponed ruling on that issue, Lawson never raised it again; in fact, when asked at the end of the court's voir dire whether the parties had any additional questions, Lawson's only question did not address bias. Not having himself questioned the prospective jurors about bias, and not having requested the trial court to ask such questions, Lawson cannot complain that the judge failed to initiate such questioning on his own.

We must agree with Lawson, however, that the trial court improperly denied his motion to inspect and copy jury selection materials pursuant to 28 U.S.C. § 1867(f). That subsection expressly permits a party in preparing a motion to dismiss for failure to comply with the statutory provisions for selecting a jury, to inspect, reproduce, and copy records or papers used by the jury commission or clerk in connection with the jury selection process. The Supreme Court characterizes a litigant's right to inspect jury lists as essentially unqualified. Test v. United States, 420 U.S. 28, 30, 95 S.Ct. 749, 750, 42 L.Ed.2d 786 (1975). In Test the Court stated: "(W)ithout inspection, a party almost invariably would be unable to determine whether he has a potentially meritorious jury challenge." Id. Although the trial judge improperly denied Lawson's motion, reversal of Lawson's convictions is not necessary at this juncture. We will remand this case to the district court to allow appellant's counsel to inspect the relevant documents as permitted by 28 U.S.C. § 1867(f). Counsel may then file an appropriate motion pursuant to 28 U.S.C. § 1867(a) and (d). See Test v. United States, 420 U.S. 28, 30, 95 S.Ct. 749, 750, 42 L.Ed.2d 786 (1975); United States v. Marcano-Garcia, 622 F.2d 12, 18 (1st Cir. 1980). If Lawson establishes that the method of selecting the jury violated the law, the court shall then set aside the convictions.

II Motions for Acquittal

Lawson claims the trial court erred in denying his motions for acquittal at the end of the government's case and at the close of all evidence. Specifically, Lawson contends that the motions should have been granted because the government failed to establish jurisdiction, and his Fifth Amendment privilege against self-incrimination protected him from having to provide information on the tax returns; Lawson also argues the government failed to prove that he willfully failed to file returns, that he had a tax liability for the year in which he filed a withholding certificate claiming ninety-nine exemptions, and that in filing the withholding certificate he acted with specific intent to deceive his employer.

Lawson's "jurisdictional" claim, more accurately a constitutional claim, is based on an argument that the Sixteenth Amendment only authorizes excise-type taxes on income derived from activities that are government-licensed or otherwise specially protected. Lawson says the government offered no proof that his income came from such activities and therefore failed to establish jurisdiction. The contention is totally without merit. Congressional power to tax rests in Article 1, Section 8, clause 1 of the Constitution and embraces all conceivable powers of taxation including the power to lay and collect income taxes. Brushaber v. Union Pac. R. R., 240 U.S. 1, 12-13, 36 S.Ct. 236, 239-240, 60 L.Ed. 493 (1916). The Sixteenth Amendment removed any need to apportion income taxes among the states that otherwise would have been required by Article 1, Section 9, clause 4. Consistent with these provisions, Congress has taxed compensation for services, without any regard for whether that compensation is derived from government-licensed or specially protected activities, I.R.C. § 61, and this has been construed to cover earnings from labor. E.g., United States v. Russell, 585 F.2d 368, 370 (8th Cir. 1978).

Lawson filed facsimiles of 1978 and 1979 form 1040 tax returns that were blank except for his signature, printed asterisks, and materials claiming a Fifth Amendment privilege against disclosure. He thereby provided no information from which the IRS could assess his tax liability. These protest 1040 forms are not returns within the meaning of the Internal Revenue Code or the tax regulations. United States v. Porth, 426 F.2d 519, 523 (10th Cir.), cert. denied, 400 U.S. 824, 91 S.Ct. 47, 27 L.Ed.2d 53 (1970). There is no blanket Fifth Amendment protection for a taxpayer filing a protest form. E.g., United States v. Brown, 600 F.2d 248, 251-52 (10th Cir.), cert. denied, 444 U.S. 917, 100 S.Ct. 233, 62 L.Ed.2d 172 (1979); United States v. Johnson, 577 F.2d 1304, 1310-11 (5th Cir. 1978); United States v. Irwin, 561 F.2d 198, 201 (10th Cir. 1977), cert. denied, 434 U.S. 1012, 98 S.Ct. 725, 54 L.Ed.2d 755 (1978). On appeal, Lawson asserts that the Fifth Amendment protects him from completing a 1040 form because any information supplied could have been used to incriminate him under I.R.C. § 7205 for filing a false withholding certificate with his...