U.S. v. Pabisz, 792
| Decision Date | 12 June 1991 |
| Docket Number | No. 792,D,792 |
| Citation | 936 F.2d 80 |
| Parties | -5072, 91-2 USTC P 50,316 UNITED STATES of America, Appellee, v. Ronald A. PABISZ, Defendant-Appellant. ocket 90-1326. |
| Court | U.S. Court of Appeals — Second Circuit |
Mark B. Gombiner (The Legal Aid Society, Federal Defender Services Unit, New York City, of counsel), for defendant-appellant.
Douglas T. Burns, Asst. U.S. Atty. (Andrew J. Maloney, U.S. Atty., E.D.N.Y., Susan Corkery, Asst. U.S. Atty., New York City, of counsel), for appellee.
Before PIERCE, WINTER, and WALKER, Circuit Judges.
Ronald A. Pabisz appeals from a judgment of the United States District Court for the Eastern District of New York (Leonard D. Wexler, Judge ), filed on May 11, 1990, convicting him of three counts of willfully attempting to evade his federal income taxes in violation of 26 U.S.C. Sec. 7201 (1988). Pabisz principally contends that in light of the Supreme Court's recent decision, Cheek v. United States, --- U.S. ----, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), he must be granted a new trial because the jury was erroneously instructed that they could not credit his good faith defense unless they found his beliefs reasonable. In addition, he argues, inter alia, that he was denied access to information about whether any of the prospective jurors have been audited or investigated by the Internal Revenue Service ("IRS") in violation of 26 U.S.C. Sec. 6103(h)(5) (1988) and that the failure to comply with this statute is per se reversible error. For the reasons set forth below, we reverse the judgment of the district court and remand for a new trial.
In 1981 Pabisz, an electrician, began to have conversations with friends who took the position that they were not required to file individual income tax returns. He found himself influenced by his friends' views to the point where he accepted their invitation to attend a meeting where various fliers were distributed. Pabisz testified that after reading a flier that analyzed a 1916 Supreme Court case, Brushaber v. Union Pacific Railroad Co., 240 U.S. 1, 36 S.Ct. 236, 60 L.Ed. 493 (1916), he went to a law library and read several Supreme Court cases concerning the obligation to pay taxes. In addition, he studied the Internal Revenue Code, wrote letters to three Congressmen and contacted the IRS. Pabisz asserts that based upon his research, he concluded that he was not required to On April 13, 1989, Pabisz was indicted by a grand jury and charged with three counts of willfully attempting to evade income taxes by failing to file income tax returns and by filing false W-4 forms for the years 1984 through 1986.
file individual income tax returns or pay taxes. Therefore, after 1981, he did not file any income tax returns and also claimed to be exempt from withholding in his W-4 forms.
Pabisz pleaded not guilty, whereupon the government proceeded to trial on March 5, 1990. Before the defense rested, defense counsel submitted ten requests to charge, four of which concerned a claim of good faith as a defense to the element of willfulness. One request sought to have the district judge instruct the jurors to apply a subjective standard of good faith:
A good faith, honest misunderstanding of the requirements of the law is a defense to the element of willfulness. If you find that the Defendant's conduct or beliefs were the result of a good faith, honest misunderstanding of the requirements of the law, you must find the Defendant not guilty.
In determining Defendant's good faith, you must apply a subjective standard of good faith. That is, you must determine whether the Defendant actually believed what he says he believed.
It does not matter whether you consider Defendant's beliefs to be reasonable. The only question for you to decide is whether the Defendant's beliefs were honest and in good faith, even if such beliefs are unreasonable.
If you find that Defendant's conduct was the result of mistake, inadvertence or even gross negligence, you must find the Defendant not guilty.
Thus, you must look to the Defendant's actual state of mind and determine whether the Defendant's beliefs were sincerely held by the Defendant, and in good faith. Put another way, the Government must prove beyond a reasonable doubt that the Defendant did not believe what he claims he believed.
After a pre-charge conference, which was not recorded, the district judge recounted that both counsel had "consented" to "an objective reasonable test" for good faith. The wording of the instruction that the judge intended to deliver was not read into the record.
The next morning, the following colloquy occurred in chambers:
The record does not reflect what changes Judge Wexler disclosed he had made in his instructions. Significantly, no objection to the charge was made by defense counsel.
The charge on good faith that was actually delivered to the jury provided in part:
The issue for you is was the defendant reasonable in having a good faith belief that the income tax law did not apply to him, or did he willfully evade the assessment of taxes? This issue of intent as to the defendant is one which the jury must determine from consideration of all the evidence in the case bearing on defendant's state of mind.
If you find that the defendant was reasonable in believing he had a good faith belief that the income tax did not apply to him, you should find him not guilty. If you find that the government has proven beyond a reasonable doubt that the defendant willfully evaded the assessment of his taxes, you should find him guilty.
The jury returned verdicts of guilty on all three counts of the indictment. On May
4, 1990, Pabisz was sentenced to three years' imprisonment on Count One, five years' probation on Counts Two and Three, to run consecutively to Count One and concurrently with each other, and a $50 special assessment on each count. As a condition of probation, Pabisz was ordered to pay all tax liabilities and the costs of his prosecution and confinement. 1
Pabisz principally claims that the trial court erred in instructing the jury that they could not credit his good faith defense unless they found that his beliefs were reasonable. Since there is no indication in the record that Pabisz timely objected to the charge, our review is limited by the plain error standard of Fed.R.Crim.P. 52(b). See United States v. Young, 470 U.S. 1, 15-16, 105 S.Ct. 1038, 1046-1047, 84 L.Ed.2d 1 (1985); United States v. Frady, 456 U.S. 152, 163, 102 S.Ct. 1584, 1592, 71 L.Ed.2d 816 (1982); United States v. Alkins, 925 F.2d 541, 553 (2d Cir.1991).
Recently, in Cheek v. United States, --- U.S. ----, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), the Supreme Court held that it was error for the trial court to instruct the jury that in determining whether the defendant had acted willfully, it should disregard his asserted beliefs that wages are not taxable income and that he was not a taxpayer within the meaning of the Internal Revenue Code. See id. 111 S.Ct. at 613. In rejecting the Seventh Circuit's objective reasonableness test for good faith, the Court made clear that a trial court may not instruct a jury that, to negate the knowledge component of the willfulness requirement, a defendant's good faith belief that the tax laws did not impose any duty on him must be objectively reasonable. See id. 111 S.Ct. at 610-12.
The government contends that the district court's judgment should be affirmed since the charge adequately conveyed the governing legal principles to the jury and since Pabisz "ratified" the district court's charge. It also broadly maintains that "the Judge left the issue of defendant's good faith beliefs for the jury to decide." We disagree.
As the district judge noted, the pivotal issue in this case was defendant's good faith defense. In our view, it seems clear that the jury might have been seriously misled into believing that Pabisz's good faith beliefs could negate the element of willfulness only if those beliefs were objectively reasonable. Since we conclude that the jury was erroneously instructed about the principal issue at trial, we are compelled to find that "the fundamental fairness of the trial," Young, 470 U.S. at 16, 105 S.Ct. at 1047, was undermined. See United States v. Aitken, 755 F.2d 188, 193-94 (1st Cir.1985) ().
The basic problem with the instruction given is that, on the issue of good faith, the jury was not instructed that it must consider whether Pabisz subjectively believed that he did not need to file income tax returns or pay taxes. See Cheek, 111 S.Ct. at 611; United States v. Fletcher, 928 F.2d 495, 501 (2d...
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